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Real Estate - Commercial

Developers Keep Close Eye On Streams, Wetlands Rule

By Cece Nunn, posted Aug 29, 2014
An environmental consultant chose Mayfaire Town Center as an example recently as he explained a fear that’s been building in the development community since the spring.

Jim Spangler, president of Spangler Environmental Inc., said he believes Mayfaire would have been impossible to build if a rule proposed by federal agencies concerning the protection of certain wetlands and streams had been in place more than a decade ago. The expense of the additional permits and wetlands mitigation required would have made Mayfaire “cost-prohibitive,” said Spangler, who was hired to facilitate permitting for the mixed-use development before it could be built in 2003.  
 
The Environmental Protection Agency and the U.S. Army Corps of Engineers proposed the rule earlier this year. 

“Determining Clean Water Act protection for streams and wetlands became confusing and complex following Supreme Court decisions in 2001 and 2006,” the EPA explained
in a news release on the proposal. “For nearly a decade, members of Congress, state and local officials, industry, agriculture, environmental groups, and the public asked for a rulemaking to provide clarity.”

This clarity, some say, comes with a major expansion of regulatory jurisdiction over property that could fall under that protection.

“It’s a huge land grab by the federal government if that were to happen,” said Brian Eckel of Cape Fear Commercial, echoing worries expressed by other real estate professionals in the Wilmington area.

Concerns about what the rule change could mean for future projects have been driving an educational effort among builders and developers. Many questions, some say, remain unanswered.

“We’re not going to know how this rule is going to work until it’s actually applied in the field, and the regulatory agents that do that work in the field have yet to receive direct training or any additional update from their headquarters on what, if any, changes to their field protocols would be necessary,” said Spangler, who is a member of the board of directors of Business Alliance for a Sound Economy (BASE).

BASE has been working on getting the word out to its members about the rule change, designating a page on its website for the purpose and emphasizing that the agencies extended the public comment period on the rule change to October.

The Town of Carolina Beach passed a resolution in August asking that the EPA and Corps of Engineers suspend consideration of the rule until its economic impact can be studied and other concerns addressed. The EPA has created a website titled “Ditching the Myth” with the purpose of addressing what the agency has deemed “concerns and misconceptions” about the proposal, such as the suggestion that it puts all ditches under the protection of the Clean Water Act.

“The proposed rule actually reduces regulation of ditches because for the first time it would exclude ditches that are constructed through dry lands and don’t have water year-round,” the “Ditch the Myth” page says.

The site also refutes the idea that the proposal has anything to do with grabbing land.

“The Clean Water Act only regulates the pollution and destruction of U.S. waters. The proposed rule would not regulate land or land use,” the website says.

One of the major worries is the potential for subjective interpretation on the part of regulators of what should be protected.

“People have different agendas,” said Grayson Powell, managing partner at Coldwell Banker Commercial Sun Coast Partners. “The way this thing is written, it allows for interpretation and there doesn’t seem to be any barrier to that interpretation.”

Spangler said he believes it’s safe to say that some additional areas will be subject to Clean Water Act protection, but how much, and at what cost, remains to be seen.

“Without clear guidance and something that’s objective, it’s difficult to put a [monetary] number on the impact that this is going to create,” Spangler said. “It’s not inconceivable to have very, very similar projects in two different locations costing two completely different amounts.”

Asked about the possibility of limiting the rule-making power of regulatory agencies such as the EPA, U.S. Sen. Richard Burr (R-N.C.) said one of the only tools federal lawmakers might be able to use is inserting “limiting language” in appropriations bills through the appropriations process. In the past, he had proposed the merger of agencies, such as the EPA with the Department of Energy, Burr said, speaking recently to business owners, bankers and others at the Wilmington Chamber of Commerce.

“Having one person in charge of both sides of the same issue is important because I’d much rather have this debate internally within the agencies versus externally where it impacts fiscal decisions, business decisions, in a way that may not be right,” Burr said. “The EPA and the Department of Labor seem to be the most prolific in proposing rules. Whether they go through with the final rule or not, they sure go out there and sort of lay them out for everybody to fear.”

How to comment

The deadline to submit comments on the proposal, which can be done the following ways, is Oct. 20:
Online: www.regulations.gov
Email: [email protected]. Include EPA-HQ-OW-2011-0880 in the subject line of the message.
Mail: Send the original and three copies of your comments to Water Docket, Environmental Protection Agency, Mail Code 2822T, 1200 Pennsylvania Avenue NW, Washington, DC 20460, Attention: Docket ID No. EPA-HQ-OW-2011-0880
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