California Tahoe Conservancy: Progress Report - Land Coverage And Other Marketable Rights

As the land has been covered with buildings, roads, parking lots and other types of impervious surfaces, the capacity of many watersheds to perform their natural functions has been seriously impaired. In many locations, development has generated more runoff and erosion than is being absorbed on site or even within the watershed.

In a number of cases, the capacity of watersheds to tolerate these impacts can be improved by removing unneeded development or retiring the development potential of parcels which are currently contributing to water quality problems, or are likely to do so in the future. These sites can then be rehabilitated, and the development rights transferred to less environmentally sensitive land.

In addition, the impacts of existing over-covered parcels and of new projects that must be located in sensitive areas can be mitigated by ensuring that sufficient uncovered or, if necessary, restored land is available to help absorb the impacts, on or off site.

Complementing available private mechanisms, the Conservancy has established a program to meet these needs by dealing with land coverage and other marketable rights.

Acquiring and Restoring Land
Initially, the Conservancy identifies individual parcels that are creating water quality problems, or could in the future, and then tries to acquire them, in order to retire the development potential of the site. Such properties range from parcels in a wetland that have dilapidated and unused structures on them, to lots that are eroding or could erode if the soil is disturbed.

After the Conservancy acquires the property, the site is restored as necessary, any unwanted buildings are demolished, unneeded asphalt is removed, the site revegetated, and erosion control measures are installed.

Generating Rights and Credits
The retirement of the development potential on these properties could generate a wide range of development rights or credits, depending on what existed or was credited to the property at the time of acquisition. Included are such things as existing or potential land coverage rights, as well as mitigation credits for eliminating the property's impact on sensitive land. These rights can then be transferred to other sites or used on-site for new projects.

These rights are reserved for projects in the areas of origin in order to maintain the economic base of these communities.

The Conservancy may also incidentally acquire, as part of its overall acquisition activities, other types of rights, such as those for tourist accommodations, sewer connections, residential units or commercial floor area. Such rights are recognized by various regulatory agencies in the Lake Tahoe Basin, and can be sold or transferred under the proper circumstances.

Allocating and Distributing Rights
All such rights and credits acquired by the Conservancy are stored in a "land bank" set up for this purpose. The Conservancy then allocates these credits or rights for both public and private projects, based on projected demand.

Recognizing that both the public and private sector are in need of such rights, the Conservancy's policy is to try to meet a portion of the needs within each category. The credits or rights are further allocated based on projections of need among various purposes, such as mitigation for projects involving over-covered parcels, the reservation of rights for new public projects and projects within community plan areas, and open market sales to support private projects.

The allocated credits and rights are then made available for both public and private projects through a public notice process, and are either transferred or sold, at fair market value. For private projects, the rights are either sold "off-the-shelf" or through an auction or bid process, depending upon demand. For public projects, agreements are entered into between the Conservancy and various public agencies. In every case, all proceeds are then "recycled" for new acquisition and restoration activities.

Program Benefits
This program has been designed to help meet a number of resource project development and implementation needs of project sponsors, and to provide funding benefits as well. Ultimately, it is hoped that the program will operate on a largely self-sustaining basis.

Land Restored
The primary resource benefit of the program is that it makes possible the acquisition and restoration of developed areas that have become degraded, and that have contributed to water quality problems or could in the future.

It also allows the Conservancy to undertake larger and more beneficial restoration projects than would be possible under a strictly private-market approach, and to realize water quality benefits from these projects even before the rights are needed. It also ensures that resource benefits are sustained through ongoing management activities.

The program can also enhance scenic values by allowing the removal of unsightly buildings. It can help owners rehabilitate existing homes and businesses. And since unneeded commercial rights are reserved in their area of origin, it can also aid in the redevelopment of declining commercial areas.

Process Speeded
Another important benefit is that the Conservancy's ability to acquire and allocate rights helps simplify and speed up the planning and implementation of both public and private projects. The ready availability of such credits or rights allows project proponents to acquire even small amounts of coverage through the Conservancy's land bank, without going through the time-consuming processes of separately acquiring and restoring land and disposing of surplus rights on their own. Further, the banking of rights may help facilitate future projects identified in various ongoing planning efforts.

In providing this assistance, the program attempts to bridge the gap between regulatory requirements and the property owner's ability to meet them. Mitigation requirements can also more easily be achieved and monitored by the regulatory agencies when such land coverage restoration and retirement activities are coordinated through a central program.

Funding Recycled
Another important benefit of the coverage program is that it provides funding that can be put back into the ongoing operation of the program.

The proceeds from the sale or transfer of rights are then used for the acquisition and/or restoration of additional properties, which in time generates more credits and rights that can be made available to the public and to other public agencies or more resource benefits.

The Conservancy's land coverage program is unique in that it brings together under a single umbrella the functions of acquiring, restoring and managing land; receiving and utilizing mitigation fees for private and public projects; and selling credits on the open market. The combination of these functions in a single entity helps maximize resource benefits and the cost effective use of funds.

Over the life of the program, the Conservancy has authorized the expenditure of more than $4.9 million for the acquisition of more than 1.2 million square feet of coverage. More than 300,000 square feet of old coverage has already been restored.

Credits to mitigate excess coverage have been provided for more than 2200 private and public projects, and coverage and other marketable rights have been transferred to more than 215 private residential and commercial project.

Mitigation for various needs has also been provided for several major public agencies, such as the North Tahoe Community Conference Center, the South Lake Tahoe Airport, the El Dorado County Jail Expansion Project, and a number of important California Department of Transportation and public utility district projects.

Through these various activities, the Conservancy's land bank also generated more than $2.3 million to be reinvested in further acquisition and restoration activities.