What do you do with a wetlands mitigation bank when it’s running out of mitigation credits?
The private investors that own Spanish Lake Restoration LLC—a 4,000-acre wetlands mitigation bank in east Iberville and Ascension parishes that drains all of St. Gabriel’s stormwater—will ask the St. Gabriel City Council tonight to partner with them on developing a wetlands ecological center on the site.
The deal would be a proverbial win-win.
• The 43 investors that own SLR would get a tax credit for donating the use of the land, which they acquired for $9 million in 2009.
• The city would get use of the land to build and operate a nature center, which it could then use for wetlands education, recreation, and to generate revenue by renting out space for meetings and events.
Wetlands mitigation banks are big business. Developers are legally required to buy mitigation credits from mitigation banks in order to develop on wetlands. Investors are attracted to mitigation banks because the price of credits goes up over time: In 2000, the mitigation cost of impacting an acre of wetlands was about $1,000. Two decades later, this acre impact has increased to approximately $80,000.
Given that Louisiana is home to one-third of all wetlands in the U.S, there’s a big market for the credits and lots of investor-owned banks willing to sell them.
• Banks only have a pre-set number of credits to sell. When they’re gone they’re gone, and the investors can’t sell, develop or profit off the land.
• SLR only has about $30 million worth of credits left. At the current rate of $80,000 per acre, that’s only 375 acres remaining.
• Most investors walk away when a mitigation bank is spent. SLR wants to use its lands to benefit the community for conservation and ecological purposes, says wetlands consultant Scott Nesbit, a part owner of SLR and its chief technical officer.
• “It is a tremendous asset to the city of St. Gabriel,” Nesbit says. “We want residents to understand the value of what they have and to create something that will help teach school kids and the community about the environment and the importance of our natural wetlands, especially today with so much flooding.”
Nesbit estimates SLR could run out of mitigation credits by the end of this year.
The St. Gabriel City Council meets tonight at 6 p.m.
(Editor’s Note: This story has been updated to correct the difference in acre value from 2000 to 2021. Daily Report regrets the error.)