Lummi Nation has launched a wetlands preservation system that could help to speed up the process of getting development permits for anything from new homes on the tribe's reservation to larger projects elsewhere in Whatcom County - possibly even the Gateway Pacific Terminal project proposed for Cherry Point.

The system is called a mitigation bank, and it offers one potential way for developers of large and small projects to deal with the complex and sometimes costly environmental regulations that protect wetlands and wildlife habitat. Federal and tribal officials say the mitigation bank can accomplish that without weakening wetlands protection regulations.

"The Lummi Nation has worked with our federal and state partners for over a decade to develop our mitigation bank, which we intend to use to effectively and efficiently mitigate for unavoidable impacts associated with critical housing, municipal and commercial development, primarily on but also off reservation," Lummi Indian Business Council Chairman Cliff Cultee said in a press release.

At this point, SSA Marine's Gateway Pacific Terminal coal port is likely years away from being in a position to take advantage of the Lummi mitigation bank. Tribal officials say they set up the bank primarily to benefit their own tribe members, not non-Indian developments. But they acknowledge that projects along the coast from the reservation to the Canadian border would be eligible to use the bank, subject to regulatory approvals.

FIRST TRIBAL BANK

Mitigation banks are not a new idea, but they are new to Whatcom County and Lummi Nation is the first Indian tribe to establish one. The Seattle office of the U.S. Army Corps of Engineers, a key wetlands regulatory agency, reports it has now authorized 13 mitigation banks, but the one at Lummi will be the largest in the state.

In many cases, someone who needs to fill in a wetland to build a project is required to build a new wetland, on the site or nearby, to compensate for - or, in government-speak, "mitigate" - the wetland that is lost.

Before the development can proceed, the new wetland must be created and the developer must be able to demonstrate that it is functioning well in the environment. That takes time and money.

The mitigation bank offers a shortcut: Lummi Nation is upgrading and enhancing wetland areas on tribally owned reservation lands in advance of development. Developers who face a wetlands mitigation requirement may have the option of purchasing mitigation credits from the tribe, instead of designing and building their own wetlands projects for approval by the Army Corps.

They would be covering the cost of creating and maintaining wetland areas that the tribe has already built, instead of going through the process of designing and building a new wetland and then proving that it meets environmental standards.

In the first phase of mitigation bank development, the tribe will improve about 380 acres of existing wetlands with plantings of conifer and willow trees and control of invasive plants, while also providing a conservation easement that protects 842 acres from development. Eventually, the tribe expects the bank to contain 1,945 acres of wetlands and adjacent habitat that have been improved to give them greater environmental value for salmon and other wildlife.

The wetlands improvement projects will generate the mitigation credits that developers could buy, subject to approval by state, federal and tribal regulators. Developers would still be required to demonstrate that the filling of wetlands on their property was unavoidable.

Merle Jefferson, executive director of Lummi Natural Resources Department, said the wetlands bank has been in the works for 10 years or longer. It originally was envisioned as a way to help tribe members meet wetlands requirements when they wanted to build homes on their allotments of tribal land. The reservation is about 40 percent wetlands.

As Jefferson sees it, new on-reservation homes for tribal members remain a key goal of the mitigation bank. While non-Indian developers may pay $150,000 or more per mitigation credit, those credits will be available free to tribe members building homes on the reservation for personal use.

"It's going to be easier for people to build," Jefferson said. "This is a really positive thing for the tribe. People can't afford to go out there and mitigate."

How many credits would an off-reservation developer need to buy? There's no simple answer to that question. Wetlands are classified according to their environmental value, and under existing rules developers sometimes have to create more than one acre of wetlands for each acre they want to fill. A developer filling one acre of wetlands might need to buy more than one credit, depending on the quality of the wetlands the development would take away.

The bank is starting small. The first group of 19 mitigation credits will be available for purchase in September, tribal officials say. Eventually, tribal officials expect to create 725 total credits to be given to tribal members or sold to non-Indian developers.

Jefferson estimates that 80 percent of credits are likely to be used by the tribe, but the tribe will be willing to sell some of them for off-reservation projects. too.

"We have discretion who we're going to sell it to," he said.

The market will play a role in setting the price of wetlands mitigation credits to non-Indians. Tribal officials say they have been advised that a single credit could go for $150,000 to $250,000.

At that price, the tribe would not have to sell very many to recoup estimated costs of $5 million for land acquisition and improvement, plus $160,000 a year to operate the program. Tribal officials say they are using their own revenue for those costs, not grant money.

Tribal officials declined to confirm or deny any conversations with SSA Marine, which is seeking permits to build the Gateway Pacific Terminal project to export coal and other cargoes from Cherry Point. Tribal officials did say they had been approached by several non-Indian developers interested in the program, and noted that Cherry Point is within the service area eligible to use the Lummi mitigation bank.

Jefferson added that the tribe is giving the Gateway Pacific process close study, and expects to weigh in during the scoping process that determines what environmental issues must be studied to lay the groundwork for the project.

Reach JOHN STARK at 715-2274 or john.stark@bellinghamherald.com . Read the Politics Blog at blogs.bellinghamherald.com/politics.