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Irene Pond near Belfair was purchased under the Hood Canal Coordinating Council’s In-Lieu Fee Program. The 17-acre property is mostly natural with a high-quality wetland, forested habitat and Irene Creek, a tributary of the Union River. Protection and restoration of the site provides credits to offset highway-construction impacts in Belfair by the Washington Department of Transportation. // Photo: Hood Canal Coordinating Council.

Construction fees support local program that protects and restores rare habitats in Hood Canal

This is the final blog post in a three-part series this week about the Hood Canal Coordinating Council and two of its groundbreaking initiatives: recovery of Hood Canal summer chum and a structured mitigation program that is protecting and restoring the ecosystem.

Big construction projects often trigger big conservation projects, because federal and state laws require mitigation for environmental damage. For the past 12 years, Hood Canal Coordinating Council has been working quietly to protect and restore shorelines, wetlands and freshwater habitats in Hood Canal by using funds spun off from construction by the U.S. Navy and others.

In 2012, for example, the Navy provided $6.6 million in mitigation fees to compensate for environmental damage to the ecosystem caused by a new $448-million explosives handling wharf for submarines on the waterfront at Bangor. Under a federally approved program, the coordinating council was allowed to take the mitigation money up front. That allowed the Navy construction to proceed without delay.

Waterfront mitigation sites on Hood Canal purchased for protection and restoration to offset impacts from marine construction. Map: Hood Canal Coordinating Council

Over the next six years, those mitigation fees were then used to buy and restore three shoreline properties: a 20-acre parcel between Vinland and Lofall in North Kitsap, a 31-acre site along Little Dewatto Bay near the Kitsap-Mason county line, and a 7-acre parcel near Anderson Landing Park in Central Kitsap. Also acquired was a freshwater wetland called Myrvang on Gamble Creek in North Kitsap.

Hood Canal Coordinating Council’s In-Lieu Fee Program, which allows this type of exchange, is one of four such in-lieu fee programs in Washington state. The others are managed by King County, by Pierce County and by the Tulalip Tribes.

The exchange of up-front cash for later-on mitigation is highly controlled by federal regulations and a formal agreement that creates a credit system for balancing damage with protection and restoration. Credits are sold to developers based on an assessment of the damage. When mitigation work is completed, the environmental improvement is assessed, and those credits are used to balance the ledger.

Parties to the Hood Canal agreement include the Army Corps of Engineers and Environmental Protection Agency, both federal agencies, along with the Washington Department of Ecology. In all, 16 agencies, including tribes, were involved in drafting the original agreement, including this guiding principle: “no net loss of ecological function.” See prospectus, 2011 (PDF), along with the basic agreement, 2012 (PDF).

When the Hood Canal mitigation program was established, Navy Capt. Chris LaPlatney,   commander of Naval Facilities Engineering Command Northwest, said he was happy to defer the mitigation work to the coordinating council.

“This enables us to carry out our core competence, which is national defense,” he said (Kitsap Sun, July 18, 2012).

David Dicks, who recently took over as executive director of the coordinating council, said the in-lieu fee program offers special environmental protections when compared to traditional mitigation conducted by developers themselves. The program allows for larger-scale restoration projects, which tend to have more ecological value, and the projects are managed and guaranteed to remain protective of the environment in perpetuity.

As a lawyer, Dicks has been involved in other mitigation projects, including Blue Herron Slough, a 353-acre wetland near Everett in Snohomish County being used as a mitigation bank. Mitigation banks, like in-lieu fee programs, use an exchange of credits to account for environmental damage and improvement. Mitigation banks rely on established sites where restoration has been completed, as opposed to sites that can be selected and restored in the future under the in-lieu-fee program.

On Big Beef Creek estuary near Seabeck, 40 acres of tidelands and 2 acres of forested uplands are being protected and restored under the In-Lieu Fee Program. Photo; Hood Canal Coordinating Council

Based on his experience, Dicks said he believes some improvements can be made to the Hood Canal program, which will require in-depth discussions within the organization and with parties concerned with environmental protection and restoration.

Mike Lisitza is mitigation program manager for the coordinating council. His duties include managing credit sales, site selection, mitigation project design and project implementation. He works with the interagency review team in program oversight and coordinates with advisory partners on long-term stewardship and site acquisition.

The nationwide shift toward larger-scale restoration projects began in 2001 when the National Research Council published a report saying the goal of “no net loss” of wetlands was falling short, in part because federal guidelines called for mitigation projects to be located as close to the permitted development as possible. At the time, preference was given to on-site mitigation without adequate consideration for ecological function or long-term results, the report said.

“The more degraded the local site and the more degraded the watershed, the less likely it will support a high-quality project,” the report stated. “Thus, opportunities for in-kind compensation need to be sought within a larger landscape context.”

In 2008, the Army Corps and EPA changed course with a new rule that provides guidance for today’s activities in wetlands, streams and other aquatic environments. As before, the highest priority is to avoid environmental impacts altogether. If that’s not possible, then damage should be minimized. The biggest change is a focus on long-term success, an emphasis on projects that require less management and assignment of long-term liability to the party responsible for the mitigation.

While mitigation carried out by developers was still allowed, the new rule showed a preference for mitigation banking at selected sites and for in-lieu fee mitigation in which a government or non-profit “sponsor” pools mitigation dollars from multiple development projects to carry out larger-scale mitigation.

Mitigation banking and in-lieu fee programs allow a developer to pay a fee and walk away, no longer worried whether the mitigation could fail.

For Hood Canal Coordinating Council projects, long-term ownership and management is handled under a stewardship agreement with Great Peninsula Conservancy land trust. Hood Canal Salmon Enhancement Group has been involved in restoration of numerous projects, particularly the removal of invasive vegetation.

Because many areas of Hood Canal are in a fairly natural state, the coordinating council has placed a priority on buying properties for protection and relatively minor restoration, Dicks said. By selecting sites where protection and restoration go hand-in-hand, the coordinating council can often exceed the no-net-loss standard and accomplish net gain in habitat function. The council has developed an assessment system that helps determine the best sites for this approach.

Among changes in the works for the mitigation program is a potential expansion of the “service area,” which defines where in-lieu fee mitigation can be used. The council is just beginning to reach out to key constituents who have a role in environmental protection.

Said Dicks, “We would like to offer high-level compensatory mitigation across a wider area to cover a variety of impacts that could ultimately affect Hood Canal.”

Saltwater development with mitigation fees paid to HCCC

  • Navy Explosives Handling Wharf, Bangor submarine base, covering 6.3 acres over water, mitigation fees: $6.6 million
  • Private bulkhead, near Potlatch, 2014, mitigation fees: $60,500
  • Private bulkhead, near Belfair, 2016, mitigation fees: $28,000
  • Navy waterfront security structures, Bangor submarine base, 2020, 0.8 acres affected, mitigation fees: $4.9 million
  • Private bulkhead, near Brinnon, 2020, mitigation fees: $27,123
  • Navy Service Pier Extension, Bangor, 2020, 0.2 acres affected, mitigation fees: $4.1 million.
  • Point Julia boat ramp, near Port Gamble, Port Gamble S’Klallam Tribe, mitigation fees: $1.06 million
  • Private bulkhead, near Belfair, 2020, mitigation fees: $27,123

Freshwater development with mitigation fees paid to HCCC

  • Navy Explosives Handling Wharf, Bangor submarine base, 2012, mitigation fees: $328,399
  • Highway 3 widening, Belfair, Washington Department of Transportation, 2014, mitigation fees: $204,754
  • Roundabout, Highway 104 and Beaver Valley Road, Jefferson County, Washington Department of Transportation, 2024, wetlands and buffers affected: 0.15 acres, mitigation fees: $210,330

Sites purchased for protection and restoration

  • Irene Pond, near Belfair, 2014, 11.9 acres of wetlands, 0.7 acres of wetland buffer, 5.1 acres of uplands with a stream
  • Myrvang wetlands, near Poulsbo, 2015, 20.4 acres of wetlands, 2 acres of uplands.
  • Little Anderson, near Seabeck, 2017, 6 acres of tidelands, 6.4 acres of forested uplands with a stream
  • Olson property, between Vinland and Lofall, 2018, 6.5 acres of tidelands, 20.4 acres of forested uplands
  • Little Dewatto, near Kitsap-Mason county line, 2018, 4.8 acres of tidelands, 32 acres of forested uplands with a stream
  • Big Beef, near Seabeck, 2019, 39.7 acres of tidelands, 2.1 acres of forested uplands with a stream.

Part 1 in this series discussed new leadership at the Hood Canal Coordinating Council. Part 2 focused on the effort to remove Hood Canal summer chum from the Endangered Species List.

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