Memo from City Manager to City Council Regarding Possible Wetlands Mitigation Bank at Alameda Point, September 1, 2015



On January 21, 2015, the City Council directed City staff to research the concept of implementing a wetlands mitigation bank at Alameda Point, including engaging in discussions with relevant state agencies and mitigation banking consultants. In response to the direction provided by the City Council, the following is a summary description of wetlands mitigation banks, their creation procedures, partnership structures, revenue potential, and implementation feasibility at Alameda Point. This research and analysis was performed by City staff in consultation with a wetlands mitigation bank developer, the California Department of Fish and Wildlife (CDFW), and the City’s environmental consultant and legal counsel.

As property is developed along the coastline of San Francisco Bay, regulatory agencies such as the Army Corps of Engineers (Army Corps), U.S. Fish & Wildlife Service (USFWS), National Marine Fisheries Service (NMFS), Regional Water Quality Control Board (RWQCB), and the CDFW have the jurisdiction to require developers - both public and private - to mitigate any loss of wetlands, in this case tidal wetlands. (For the purposes of mitigation banking, tidal wetlands are defined as areas that are inundated by water at a frequency and duration sufficient to support vegetation that is specifically adapted to thrive in saturated soil conditions.) Whereas in the past, permitting agencies required that developments be designed to completely avoid negative impacts on wetlands, a currently popular solution is to allow developers or other entities affecting wetlands, to create wetlands elsewhere along the Bay’s coastline in exchange for any proposed destruction of existing wetland habitat.

This creates a market for locations in the Bay Area for the restoration or creation of wetlands by developers needing to mitigate impacts to wetlands. Property owners in possession of former or would-be wetlands can now sell the restoration or creation rights of those wetlands to developers eager to satisfy the permitting demands of regulatory agencies. While some smaller wetland properties are restored as direct mitigation for the impacts of a specific development project in another location (referred to as “project-specific mitigation”), a more common application is the creation of a wetlands mitigation bank wherein a property owner, often in conjunction with a wetlands mitigation bank developer with expertise in wetlands banking, receives advance approval from regulatory agencies to restore or create a specified wetlands area and then sells those restoration credits to developers or other entities affecting wetlands. Ultimately, the credits for mitigating wetlands are banked by one property owner and then sold on demand to a developer elsewhere within the region. In this way, developers are charged for negative impacts to wetlands habitat, the overall acreage of wetlands is held stable or grows, and property owners of unrestored or potential wetlands can turn otherwise unused property into passive open space and a source of potential revenue.

City staff determined that there are two areas within Alameda Point that should be evaluated as possible locations for a wetlands mitigation bank due to their open space zoning designation: Depave Park along the western shoreline of Seaplane Lagoon (approximately 12 acres) and the designated open space in the Northwest Territories along the Oakland Estuary which totals approximately 158 acres (see Exhibit A). In consultation with technical consultants and experts, these locations were further analyzed as feasible locations for a wetlands mitigation bank, as described further below.