Environmental Assets Sought in Seized S&L; Land : Policy: Regulators agree to look for signs of endangered species, wetlands and the like to determine whether a site should be protected.

In a policy change long advocated by conservation groups, federal regulators have decided to look for environmental value in properties seized from failed savings and loans before they herd them to the auction block.

Under new guidelines imposed without publicity during the past few weeks, banking regulators will notify local and state governments--and even private conservation organizations--when the habitat of an endangered species, a wetland, or some other environmental asset is discovered in the government’s land portfolio.

In some cases, they will finance purchase of such properties by local or state governments.

The policy shift was signaled in directives to staffers of the Federal Deposit Insurance Corp. and the Resolution Trust Corp., the intertwined agencies in charge of sorting out the savings and loan mess.

“It really is a big step forward,” said David Frederick, an attorney with the Texas Center for Policy Studies, which has argued for such assessments of the thousands of acres of land that have come under federal ownership during the S&L; crisis.

“Right now, the RTC is trying to survey its land using real estate brokers,” Frederick said, “and even the best-intentioned real estate broker may not recognize a wetland.”

Under the new staff directives, the U.S. Fish and Wildlife Service or private consultants who specialize in environmental surveys will be brought in to examine properties when routine visits find signs of possible environmental value.

No one knows how much land could be affected. The properties most likely to be of environmental interest, though, are undeveloped or minimally developed lots. In its latest inventory the RTC reports about 11,700 such properties, while the FDIC, holds just under 3,100.

Beyond the new policy directives, the banking agencies are facing a lawsuit filed in Northern California last week charging that the Endangered Species Act all along has required them to consult the Fish and Wildlife Service before selling sensitive properties.

The suit--which centers on an 85-acre lot in San Rafael that may be a home to the endangered salt marsh harvest mouse--could eliminate remaining confusion about the impact of environmental laws on the savings and loan cleanup.

Federal regulators have insisted until now that their own staffs can meet legal requirements that seized properties be inventoried for environmental significance, as well as historic, cultural or scientific importance. Their prime responsibility, they have argued, is to efficiently dispose of the properties with the best return to taxpayers.

Environmentalists have wanted Fish and Wildlife to do the work. But bringing in Fish and Wildlife, said many regulators, would just involve more bureaucratic entanglement.

This spring, the National Wildlife Federation brought the issue to a head by threatening to sue the RTC under the Endangered Species Act over properties outside Austin, Tex. Robert Irvin, a federation attorney, says he now will watch the implementation of the new policies during the next three months before filing suit.

Regulators tend to downplay the policy shift. The FDIC simply put into writing what it had been doing on a case-by-case for several years, according to Alan S. McCall, an assistant director in the agency’s division of liquidation.

“We can read the papers like anybody else, and RTC was starting to get hammered,” McCall says. “So we said, ‘Why not put it in writing?’ ”

The Northern California lawsuit puts new pressure on regulators and developers alike.

Filed last week in U.S. District Court in San Francisco by the Sierra Club Legal Defense Fund, representing the Marin County chapter of the Audubon Society, it contends that the FDIC and a Marin County developer violated the Endangered Species Act.

The suit says the FDIC failed to check with Fish and Wildlife before selling a lien on the San Rafael marshland.

It is thought to be the first such lawsuit in the country, but lawyers expect it to prompt others, since it is likely to clarify how federalenvironmental laws apply to the FDIC and RTC.

The two agencies have steadfastly denied that they must always take federal environmental statutes into account.

“In some ways (the FDIC) is a hybrid,” says Debra Myers, managing attorney for the agency’s Irvine office. “In some instances, it is ruled by federal rules, but in others, it is more like a private entity.”

In the case of the Marin marshland, Myers contends, the FDICwas acting as the successor to a failed Texas savings and loan; in that capacity, she says, the requirements of the Endangered Species Act did not apply.

The California developer, Sausalito attorney Joseph Lemon, says he is willing to jump through all the necessary environmental hoops to develop 25 acres of the 85-acre property. He will even foot the bill to improve the wetlands portion of it and complete a municipal road that borders both sides of the property. But he thinks that the lawsuit will make other developers gun shy of former S&L; lands.

“I think it could definitely affect the way people buy from the government . . . if they can’t transfer good title,” Lemon says.

Real estate industry leaders also are concerned about the new environmental scrutiny that former S&L; lands will be receiving from regulators.

“Any additional review is going to, No. 1, reduce the value of the property, if there are conditions put on by the RTC when they offer it for sale,” said Robert M. O’Toole, senior staff vice president for residential finance at the Mortgage Bankers Assn. in Washington. “And No. 2, it’s going to delay the process.”

Conditions are what some environmentalists now want. Some call for restrictions on what developers can do with environmentally sensitive properties. Others want properties sold at little or no cost to preservation agencies for wildlife sanctuaries or parks.

BACKGROUND

Thousands of properties across the country have been seized from failed savings and loans by federal regulators, primarily the Resolution Trust Corp. The RTC must inspect these properties for natural, cultural, recreational or scientific values, and environmentalists have sought to use such an inventory to help set aside endangered-species habitat, wetlands and other lands. But the RTC’s inventory has been criticized as slap-dash. The Nature Conservancy, for instance, contends that 848 of 1,000 properties that the RTC identified as having natural significance in reality were homes or condos on oversized lots or with ocean views.