BusinessReport.com

The affray over Spanish Lake Basin has all the elements of Louisiana environmental high drama: centuries-old bald cypress trees at risk, homeless alligators, abandoned rookeries and flooded wetlands.

One on side is a beloved conservationist guide who has taken children and adults on tours of this picturesque swamp for years and claims Alligator Bayou, its inhabitants and his business are slowly being killed.

On the other are mitigation banks nobly insisting they want to restore the basin to its natural state—a forested wetland that has been drowning for decades to create an artificial swamp.

But make no mistake: The scenic swamp/forested wetland is but a backdrop; the emotionally charged accusations, hyperbolic dialogue.

The real dispute here is between two business interests over money. Lots of it.

Alligator Bayou Tours owners Frank Bonifay and Jim Ragland have invested and made millions since they bought their first acreage in 1993.

Resource Environmental Solutions, Lago Espanol and Rivalake stand to make up to $40,000 per acre by turning their land into a mitigation bank and selling credits to developers or municipalities to compensate for damage to other wetlands during development.

Says Eugene Turner, a professor of LSU’s School of Coast & Environment: “There are lots of pressures here for big money.”

A judge or jury ultimately will declare a winner. Spanish Lake Basin is now the subject of two lawsuits filed in recent weeks in the 23rd Judicial District Court in Ascension Parish—one by Bonifay; the other by the Louisiana Environmental Action Network, or LEAN.

Two issues must be resolved: First, did Ascension Parish President Tommy Martinez have the legal authority to drain Alligator Bayou and Spanish Lake? And second, what is the true natural state of the basin?

The standoff begins

The standoff began in late March, when Iberville Parish President Mitch Ourso sent a letter to Martinez, asking the floodgate be opened “immediately” to allow water to drain from Spanish Lake Basin.

The 10,000-plus-acre subbasin is an ancient backwater swamp of the Mississippi River bounded by Ascension, East Baton Rouge and Iberville parishes. It is part of the 20,000-acre Bayou Manchac Basin and the 16-parish Lake Pontchartrain Basin that covers southeast Louisiana.

Located on the Mississippi River Flyway, it is known as a resting spot for pelicans, ibis, cormorants, roseate spoonbills and other neo-tropical migrants during their flights between Canada and Central and South America.

The basin also is proving a popular permanent residence for humans. Since hurricanes Katrina and Rita in 2005, more than 2,000 acres within the agricultural fields and pasture near or adjacent to Spanish Lake have been approved for development. More could be on the way if water levels are lowered in the basin.

History provides a mixed record of the true nature of the Spanish Lake region, whether navigable waterway or forested wetland.

There is evidence of Native American hunters and gatherers in the area dating back to 6,000 B.C.

Journal entries by Pierre Le Moyne, Sieur d’Iberville, who slept at the convergence of Alligator Bayou and Bayou Manchac, describe extensive forest resources and abundant wildlife. “One of the prettiest spots I have seen,” he wrote. “Fine level ground, beautiful woods, clear and bare of canes.” But he also noted that the flood line in the area was five feet high-—higher even than that at the convergence of Bayou Manchac and the Mississippi River.

In 1770, Lt. Philip Pittman recorded that Alligator Bayou was full of fish all year round, which gave it its Native American name Anatamaha—translated as “the fish place.” The fish, in turn, supported the alligator population, engendering the European name for the waterway.

By 1775, a busy landing of warehouses emerged at the convergence of Alligator Bayou and Bayou Manchac, where sloops and schooners carrying goods from the Amite River basin to the Mississippi River loaded and unloaded during the low-water season.

Over the two centuries that followed, the United States built a system of levees along the Mississippi River that altered the natural state of the waterways throughout south Louisiana, which cut the river off from the Spanish Lake Basin and impaired its hydrology.

In the early 1950s, the state—trying to improve drainage of Plaquemine Point and Point Claire—dredged Bayou Braud and Bayou Paul and built the floodgate at the convergence of Alligator Bayou and Bayou Manchac to maintain water levels in Alligator Bayou and Spanish Lake.

For 40 years, Iberville Parish operated the floodgate, maintaining six feet of water in Alligator Bayou—enough for Alligator Bayou Tours to thrive. In 1994, Iberville Parish relinquished that control to Ascension Parish since more of its residents were affected. That same year, the parish council passed a resolution to maintain the water level at 5.5 feet.

In 2002, a formal intergovernmental agreement gave the East Ascension Consolidated Gravity Drainage District control of the floodgates in conjunction with the Iberville Parish Council.

Late last year, the Gravity Drainage District dropped the water level to 3.8 feet.

That was supposed to be a compromise to ensure Alligator Bayou Tours could still navigate the waterway while responding to complaints from Resource Environmental Solutions, Lago Espanol and Rivalake that the water was impacting their lowlands in the basin.

Not good enough

That so-called compromise didn’t last long. By March, Ourso—fearing a lawsuit from the three landowners—appealed to Martinez to open the gate.

Ourso did not respond to a request for an interview. In a prepared statement this spring, he asserted the move would protect local homes and businesses.

“The Spanish Lake watershed has been critically damaged due to the Alligator Bayou floodgate being closed for many years,” Ourso wrote. “[It] is artificially impounding water and subsequently damaging local bottomland hardwood and cypress tupelo forest, including the health of the lake ecosystem. By resuming natural water flow … the area will have greater flood storage capacity in times of heavy rains, thus protecting local homes and businesses.”

The Pontchartrain Levee District has funded a study by The Shaw Group in hopes of resolving the conflict over the floodgate.

Shaw Group spokeswoman Gentry Bran said project manager Les Waguespack would not be made available for an interview with Business Report.

But in March, Waguespack told another Baton Rouge media outlet that although his study wouldn’t be ready until late next summer, it would advocate opening the locks permanently.

“The biggest problem,” he said, “is you have too much water in there [Spanish Lake] and cypress trees do not grow in water. They tolerate water, but they do not regenerate in water. You need a wet season and a dry season, which allows trees to grow. If it is flooded all the time, the trees won’t regenerate.”

Meanwhile, still at issue is whether Martinez acted lawfully when he ordered the floodgates opened.

Citing the series of intergovernmental agreements, lawyers for Bonifay and LEAN argue only the East Ascension Consolidated Drainage District No. 1 has the authority to control the floodgate—and only after a public vote by the Iberville Parish Council, which hasn’t taken place.

Bonifay also accuses Ourso and Martinez of breaking a state law forbidding the obstruction of a navigable waterway. He wants an injunction ordering the floodgate closed, returning the basin to its previous water levels, and unspecified monetary damages.

Meanwhile, low levels of dissolved oxygen contributed to a fish kill late last month that included more than 60 buffalo fish, catfish and garfish at Alligator Bayou. The state Department of Environmental Quality tested the water.

Low levels of dissolved oxygen occur in shallow water, a side effect of having the floodgate open. The warmer the water, the less oxygen it holds.

Two sides

Bonifay and Ragland were partners in Reliable Roofing Construction Co.—doing projects all over the country—when they heard about clear-cutting of cypress trees in Spanish Lake Basin. They decided to sell their company, cash in their retirement and liquidate all their other assets to buy 1,240 acres.

Today, the Bluff Swamp Wildlife Refuge is a 1,500-acre attraction, with an alligator eco-habitat, an alligator snapping turtle pond, a bobcat habitat, an old-growth forest and the Cajun Heritage Museum. They’ve also set aside their own 901-acre mitigation bank for Ascension Parish to compensate for Clean Water Act violations. Plans were in the works for an educational center.

For 13 years, they’ve also run Alligator Bayou Tours, taking tens of thousands of tourists through the swamp on the Alligator Queen. During the peak season, they led as many as five tours a day on the barge that holds up to 79 passengers. Each adult paid a $27 fee; children under 15, $22.

These days, the Alligator Queen is run aground on mud and rocks [the water is too shallow for tours], and Bonifay fears his entire business could face the same fate. In May, Bonifay began offering hour-long exhibit tours by reservation for $15 per person.

“It is shocking to have lost what is most dear to Jim Ragland, myself and everyone else,” he says, choking up and walking away from the interview for several minutes to compose himself. “They want to squeeze me financially so I sell and they can take my land.”

The intentions of the three mitigation banks aren’t clear. Rumors abound of the land becoming an exclusive duck-hunting enclave, or perhaps being purchased—possibly for mitigation—by the Baton Rouge loop.

Together, Resource Environmental Solutions, Lago Espanol and Rivalake own some 9,000 acres of contiguous land in the basin. Resource Environmental Solutions alone owns some 12,000 acres across the coast, with an eventual goal of 100,000 acres.

Fighting public perception that the three firms are motivated solely by greed, RES Managing Director Kevin Couhig on the one hand argues that mitigation banking isn’t all that profitable, but admits that “the economics of mitigation banking allow us to do well by doing the right thing.”

When pressed for an estimated return on investment, Couhig would not provide any specifics. “Why is that the important issue here?” he asks. “Our business is not about money. It’s about restoration of wetlands. The issue isn’t about what are we going to make per acre. First, it’s going to take 10 to 15 years to make that money. Second, you have to buy that property. And third, you have to be responsible for it forever. We can forecast a range of returns, but they’re dependent upon variables like weather, regulatory impacts, all those things. What concerns me is I know people like to do a simple mathematical equation.”

He notes the expense of restoring or enhancing the land, as well as the unpredictability of receiving approval as a mitigation project. After that, it could then take as long as 10 years to sell the credits. So how does Resource Environmental Solutions remain profitable?

“People think it’s a way to make a wad of money real quick,” Couhig says. “It’s not. It is a way to make a nice decent return on capital. But more specifically, it’s a way for people to invest capital in something that’s bringing about both social and environmental good. I don’t mean for this to sound arrogant, but none of us needs this to make a lot of money. But all of us are at a point in our career where we want to do something important.”

Even so, Couhig apparently doesn’t rule out possible development around the wetlands. Upscale homes already abut the basin.

“The vast majority of the money that we’ll make does not lie within the area in question, even in the banks that we’re doing down here,” he says. “They’re outside of that. They’re farmland in the same basin, but not directly impacted by the [flood]gate.”

Scott Nesbit of National Resource Professionals, who represents Lago Espanol and Rivalake, says the area also has potential as an ecotourism draw -—albeit one that is different from Alligator Bayou Tours. He mentions bird watching and dirt-bike trails.

Turner of the LSU School of Coast & Environment for one isn’t convinced the mitigation banks are motivated solely by altruism. “I’m not sure that a mitigation bank is the total objective of this group,” he says. “You’d have to ignore the entire history of that area to think there’s not going to be housing development if you lowered the water.”

A compromise?

As it stands, a compromise that would allow Bonifay and the mitigation banks seems unlikely, given the continuing nasty public feud and now two lawsuits.

Both sides maintain they approached the other early on to try to negotiate conciliation, but without success.

Still, no one seems to agree on whether Bonifay can continue to run the Alligator Queen, given the lower water levels since the opening of the floodgate.

Bonifay says the water is too low; Couhig says the barge could run if Bonifay were to dredge his lands. Nesbit insists there’s nothing stopping the Queen right now: “He still has clearance to run his boat.”