The LSU AgCenter got the OK from the Board of Supervisors this morning to enter into a contract with its chosen partner to redevelop more than 800 acres in St. Gabriel into a wetlands mitigation bank, which the center intends to leverage as a revenue generator and a teaching tool.
After receiving two qualified offers for the project, the AgCenter tapped Spanish Lake Restoration to “finance, design, construct, create, enhance, operate and maintain the mitigation bank.” As part of the preliminary deal, the AgCenter will receive rent payments each year from Spanish Lake Restoration, as well as a percentage of revenues from each credit sold. Rent will be set at $200 per acre per year until all the credits are sold, and then $150 per acre per year for the remaining 30 years. Along with rent, the AgCenter will receive 30% of the revenue from each credit sold. Spanish Lake Restoration also owns other mitigation banks in the St. Gabriel area.
LSU officials declined to provide specifics on individuals involved with Spanish Lake Restoration until after a deal is finalized. The entity is registered with the Secretary of State’s office as Conservation Land Management LLC, and its officers are: wetlands ecologist Scott Nesbit; Steve Wallace with Stantec; and Gary Phillips, chairman of the board at Republic Finance.
A mitigation bank is a wetlands area that has been restored, established or preserved to compensate for future conversions of wetlands for development activities. Under a federal program, developers can purchase credits from a mitigation bank to offset the loss of wetlands they will destroy elsewhere in the course of land development.
The AgCenter doesn’t have any estimates on how much it expects to make from the deal, says LSU AgCenter spokesman Hampton Grunewald, adding that Spanish Lake Restoration expects to have all mitigation credits available and sold within 10 years. At 10 years, rental payments for the 816 acres equals more than $1.6 million.
Prices for the credits will be set at market price and are subject to fluctuation, he says, and there are four major projects in the state which may take advantage of the mitigation bank, including the Comite River Diversion Canal.
The contract, which should be executed within the next couple of months, is set to expire 30 years after the sale of the last available mitigation credit.
According to the resolution passed by the board, the AgCenter will invest the funds from the project and use the interest on endowed chairs, scholarships, natural resource and conservation research and internship opportunities. The center has also had preliminary discussions to build a facility where the general public can learn about mitigation or the local wetland ecosystem.
“It’s a unique opportunity to use this property as an outdoor teaching laboratory to teach students and the public on mitigation and practices moving forward,” says Grunewald, adding the center also intends to develop a mitigation certification, which he believes will be the only one offered by a university nationwide. “The Army Corps of Engineers, they’re having to do in-field training on the fly.”
Bill Richardson, LSU vice president of agriculture, told the board Friday morning that over the past decade, the AgCenter has had to cut 400 staff positions as well as several programs in response to budget cuts. While the mitigation bank won’t spin off enough dollars to offset previous cuts, it is intended to be a revenue generator.