Victor Woodward and Steve Sego are aspiring bankers, but instead of amassing money, they’re acquiring wetlands.
The duo run Habitat Bank LLC, a Woodinville-based business that hopes to profit by helping developers preserve wetlands. The firm is focusing first on two areas on Snohomish County.
Taking an idea that’s worked in other states, Woodward and Sego want to set aside large wetlands in which developers can then buy "credits" to make up for smaller wetlands that are lost to new houses or other developments.
While public agencies, including King County and the Washington State Department of Transportation, have developed wetlands banks over the years, Habitat Bank is believed to be the first private firm trying to do this in Washington.
"There’s just a crying need for it here. Someone had to step up and get it done," said Woodward, who founded Habitat Bank two years ago.
The first area Habitat Bank wants to use is 230 acres of former farmland south of Monroe, just north of the Snohomish-King county line. Woodward and Sego have begun planting and restoration work there.
The proposed "mitigation bank" sits near the Snoqualmie River, which meets the Skykomish River to form the Snohomish River near Monroe. For that reason, Woodward said, the bank could mitigate for development within the entire Snohomish Basin, which extends north to Marysville and Granite Falls and south well into King County.
When developers plan homes or commercial buildings that will encroach on existing wetlands, they usually are required to create a wetlands area nearby, usually on another piece of the property. While that’s appropriate in some cases, Woodward and Sego said, it doesn’t always work.
"It forces developers to become mitigation experts," Woodward said. "They would much rather write a check and let someone else who’s an expert do it."
There also have been problems with long-term monitoring of the small wetlands areas that developers create, he added.
Sego said environmental studies also have found large, connected wetlands areas may be more beneficial than unconnected, "postage-stamp-sized" areas.
The concept of creating wetlands banks has won favor from both developers and environmentalists.
"Mitigation banking is a very appropriate tool. It provides an opportunity to have a larger, restored wetlands system," said Peggy Bill, Snohomish County conservation director for the Cascade Land Conservancy.
Once the bank near Monroe is approved, Cascade Land Conservancy likely will be given a conservation easement and help monitor the long-term use of the property, she said.
Before being allowed to sell credits to developers, Habitat Bank still needs approval for private wetlands banking from a long list of regulators.
"Washington is unique in that so many levels of government get involved in wetlands issues," Woodward said. "So many states leave it up to the (U.S.) Corps of Engineers, while here you have the state, county and city levels involved."
For that reason, the idea of pursuing wetlands banking is seen as risky, he said.
"The builders and developers have seen what banks can do in other parts of the country, and others have looked at doing banking here," Woodward said. "But no one else has made it through the regulatory morass."
That meant many developers he talked to were skeptical when Habitat Bank first got started.
Allison Butcher, public affairs manager for the Master Builders Association of King and Snohomish Counties, said developers are supportive of wetlands banking. How many of them will buy credits in Habitat Bank’s property, however, is an open question.
"What I’m hearing from developers is wetlands mitigation banking is a great concept, but I can’t say yet how well it will be used," she said.
Woodward said he has fielded inquiries from some developers interested in learning more about buying credits in the firm’s first wetlands area. Barring unforeseen delays, Sego said, Habitat Bank could begin selling those credits later this year. The firm also is talking to regulators about creating wetlands banks on other sites in south Snohomish and King counties.
In addition to attracting potential clients, Habitat Bank’s work to establish private mitigation banking in Washington has caught the attention of potential competitors. Sego said other business people have expressed interest in the concept now that Habitat Bank has blazed a trail.
There’s no guarantee that this concept will pay off. But Woodward, who majored in environmental science in college but made a career in the software industry before this endeavor, said he thinks there will be ample demand.
"You just have to build it and hope they come," he said.
Reporter Eric Fetters: 425-339-3453 or fetters@heraldnet.com.
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