Making Small Mitigation Offset Banks Economically Feasible
It has been our experience that a lot of small mitigation banking projects never get permitted. The sponsor or land owner quickly finds out the cost of land, permitting, construction, installation and monitoring/maintenance required to get credits released is too cost prohibitive. This is unfortunate because many of these projects create huge ecological benefits for water quality, wildlife, and pollinators like the endangered monarch butterfly. Mitigation Partners, Inc. (MPI) is working hard to make these projects financially viable with landowners and our clients.
Monarch caterpillar on a marsh milkweed (Asclepias incarnata) plant
To make these bank opportunities economically possible, MPI provides two solutions for landowners or clients with small acreage mitigation sites:
Permittee-Responsible Mitigation
This is the restoration, establishment, enhancement or preservation of ecological systems like wetlands and streams undertaken by the permittee in order to compensate for the impacts resulting from the action of the permittee’s specific project.
These projects regularly need fewer offsets than a commercial mitigation bank. MPI partners with landowners or investors when a particular site fits the restoration or mitigation needs of the permittee.
Projects like these do not have as large of margins as a traditional mitigation bank
However, costs and profits are realized immediately. These projects create a “win-win” for both the permittee and bank sponsor. The expense goes substantially down for the permittee and the risk is greatly reduced for the sponsor.
Mitigation Bank Joint Venture
If the landowner is willing to share in the profits, MPI and it’s investors are willing to provide the up front expense. How this works is simple.
MPI, it’s partners and investors will provide the permitting, construction, installation and monitoring/maintenance required to get credits released.
The landowner provides the property to restore. Land owners get double benefit in this scenario. They get to keep the real estate for their quiet enjoyment and share between 18% to 28% of the profit generated from credit sales. MPI, it’s investors and partners get to complete a great project without the upfront expense of acquiring the real estate.
Both of these scenarios are great for the landowner, environment, MPI and its partners. It is great when a group can come together to create amazing environmental benefit or improvements to our natural resources and share the economic upside for providing a mitigation solution for a permittee.
Mitigation Partners, Inc. Founders Dax Dickson & Tory Christensen
Resources:
Permittee Responsible Mitigation Plan Template
Permittee Responsible Mitigation-Wisconsin Department of Natural Resources
Background on Compensatory Mitigation-Environmental Law Institute
