CRE Development Mistakes: Stream & Wetland Delineation and Permitting
Perhaps the biggest surface factor that impacts how much can be developed on a property is whether or not there are streams and wetlands.
So before you commit large amounts of time and capital to a project, a stream & wetland delineation can identify to what extent a property is encumbered, and help in crafting a strategy to move forward with a project.
Guide to the video
- A stream & wetland delineation should be conducted as part of your real estate due diligence process early during land entitlement
- The federal and many state governments dictate how and to what extent a real estate developer can impact or disturb streams & wetlands as part of a project
- The presence of streams or wetlands on a site will impact a project's allowable density, the land's buildable area and a proposed real estate development site plan
Video transcript follows
Environmental considerations can be a huge question mark during a real estate development project.
Everything from tree and habitat monitoring, to endangered species coordination, to stream and wetland delineations and permitting.
And the presence of one or several of these conditions often lead to additional required cash outlays, time-delays, and can even kill an entire project.
So, it’s important to understand what to look for as part of your site selection and land acquisition strategy to avoid surprises during land entitlement. But it’s even more important to understand who to leverage and how to navigate those challenges if they do arise during a project.
Because too often developers, investors, and small business owners are uninformed about the potential pitfalls and associated land entitlement risks.
So, keep watching as I dive into how to handle streams and wetlands when it comes to our real estate development project.
What’s up everyone – it’s Matt Marsh with Marsh & Partners.
Marsh & Partners is a development and national consulting firm that helps business owners and investors maximize their real estate and transform their businesses.
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What is a stream & wetland delineation
Before you buy a property for development, it’s important you conduct adequate real estate due diligence on the site to make sure it’s a feasible project.
You’ll want investigate things like access to utilities, a site’s topography, and zoning. But to determine how much of a site is actually buildable, you’ll need to take it one step further – and that’s to understand the surface and subsurface conditions that impact what, and how much can be built.
One of the major factors that impact how much can be built on a site is whether or not there are streams or wetlands present.
Since the early 1970’s, the federal government has placed an emphasis on preserving and replenishing the U.S. wetlands – many of which have disappeared since the American settlement.
And in order to enforce those regulations, the government has placed the onus on real estate developers to thoroughly investigate any potential impacts before pursuing a project. But as a developer, how exactly do you go about doing that?
First, a preliminary assessment will assess whether a jurisdictional stream feature or wetland may be present onsite. This determination usually includes some component of desktop review and a site visit to determine potential presence.
The next step would be a comprehensive stream and wetland delineation. These are formal field investigations based on the standards outlined by the U.S. Army Corps of Engineers (USACE) in their 1987 wetland delineation manual.
A qualified environmental consultant will investigate the site for specific types of vegetation, hydric soils and wetland hydrology that may indicate a potentially jurisdictional stream or wetland. Areas would be marked and staked for verification and surveying purposes.
Once the wetland and stream delineation is complete, the USACE and any applicable state environmental agency will need to visit the site and confirm any jurisdictional features on the property.
The on-site verification will serve to formally classify the extent of jurisdictional streams or wetlands on the site.
Wetland & stream permitting: Why it's important for your development
The federal government holds the builder or developer responsible for anything that adversely impacts the environment as a result of a project.
The EPA’s sections 404 and 401 outline a series of enforcement actions against entities that conduct unauthorized activities as part of a project.
If the property doesn’t have any wetlands on the site, or if your proposed project doesn’t impact any existing wetlands, you have nothing to worry about.
But if your project in any way adversely impacts wetlands on the site, you’ll be required to get a permit. And if you as the developer don’t get a permit, you’ll be required to pay monetary penalties for violating wetlands regulations. It’s also common that developers may be required to mitigate and restore on-site wetlands if feasible, or off-site wetlands to make up for any loss of wetlands as a result of development.
If any stream impacts are proposed as part of a project, the approval process is similar to that of wetland permitting.
In many cases, streams have buffer requirements which state that development cannot encroach within a certain linear distance from the stream. So even if a development isn’t physically impacting the stream, if it’s impacting the stream buffer, permits would still be required before construction can commence.
The critical point is that before you develop a site, you should consult with an environmental consultant as part of real estate due diligence to determine if there are any streams or wetlands present on a site.
If in fact there are, it’s critical to conduct a stream and wetland delineation, and properly navigate the permitting process to ensure your project is in compliance with the EPA’s guidelines.
One of the most important things to remember is that it’s critical to properly sequence your real estate due diligence activities on the front end of a project.
Many issues that pop up during due diligence are things that can be overcome, but if they’re not uncovered early in the process, or if some of your tasks are done out of order, it can lead to big project delays and additional costs.
A stream and wetland delineation is something you want to do early in the process. Because the outcome results in a series of compounding implications that can impact the project’s profitability – things like buildable area and density, site design, etc.
We have a comprehensive real estate due diligence checklist that we’ve compiled that will help you make more thoughtful, calculated decisions during the land acquisition and site selection process.
It’s built from the lessons of our past missteps and failures, so you don’t make the same costly mistakes twice.
Check out the video description for a link to download that checklist. Or, book some time directly on my calendar if you’re currently investigating a property and need some help, or are considering pursuing a project and aren’t quite sure where to start.
Our real estate consulting services are designed to help small business owners, investors, and developers navigate the land entitlement and real estate development processes.
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