Wetlands Laws Usually Bulldozed by Builders : Environment: Seemingly strict state and federal protections almost never stop an insistent developer.

On the inland side of Pacific Coast Highway, a bare strip of land stands like an ancient artifact amid a sea of development. It is a curious stretch of muddy shoreline, so out of place among marinas and condos that onlookers wonder why it wasn’t paved years ago.

This ocean-view marsh, however, hasn’t remained untouched for lack of trying. Behind the scenes, it stands at the center of one of California’s greatest conservation clashes: Environmentalists talk of buying these wetlands, appraisers wrangle over their value, government agencies negotiate compromises and landowners complain that they are being denied their constitutional rights.

The Huntington Beach marsh, like most wetlands, is in private hands, its fate mired in what has been dubbed the “wetlands morass.” As the nation’s most depleted resource, wetlands are also the most regulated--entangled in layers of complex laws and negotiations with an array of state and federal agencies.

In the end, development is nearly always allowed; the long battles and bargaining sessions generally determine just how much can be built on each wetland.

“The net losses in wetlands continue to be very high,” said Mike Giusti, a state Department of Fish and Game biologist. “But if you go in and say ‘No, you can’t develop,’ you are getting into an issue of land-taking. At some point, it becomes no longer reasonable to ask an owner to avoid it.”

This year, two dramas are unfolding along the Huntington Beach shoreline that will test the limits of the laws that safeguard wetlands and could affect an already scarce resource.

Each illustrates the intense economic pressures that inflame the national debate over wetlands, and the struggle to balance conservation with the need to tread lightly on a landowner’s property rights under the Fifth Amendment.

At the Bolsa Chica wetlands in Huntington Beach, a developer wants to make a deal that even some environmentalists can’t resist: The Koll Co. has offered to arrange a $100-million restoration of Bolsa Chica--considered the jewel of Southern California’s salt marshes--as long as it can build on 25% of the land.

A few miles away, landowners have resorted to the courts in their effort to determine the future of a 66-acre marsh that stretches along Pacific Coast Highway from Brookhurst Street to Beach Boulevard. The investors have sued state and city officials, claiming that they unfairly stripped their land of value by prohibiting development there.

These are only two of the estimated 700 projects per year that impact Southern California’s inland or coastal wetlands, including about 150 per year in Orange County, according to an estimate by a California Department of Fish and Game official.

At stake in each battle are rich ecosystems that provide food, shelter and breeding grounds for birds, fish and other creatures, including about 200 endangered species. Beyond providing wildlife habitat, wetlands also protect inland areas from erosion and storms, and play an important role in natural filtration of water supplies.

Over half of U.S. wetlands--more than 100 million acres--have already been developed or drained; less than one of every 10 acres that once existed in California remains, according to the U.S. Fish and Wildlife Service.

Salt marshes like the ones in Huntington Beach are the rarest of the bunch; about 90% of Orange County marshes, which once lined the coast from Newport Bay to Seal Beach, are gone.

Reacting to a national cry to protect the remnants, President Bush in 1989 announced a “no net loss” policy that allows development of wetlands only if new ones are built to replace them. “It’s time to stand the history of wetlands destruction on its head,” Bush said. “From this year forward, anyone who tries to drain the swamp is going to be up to his ears in alligators.”

Since then, the Bush Administration has backed away from that policy by proposing a new definition for wetlands that would disqualify about 50% from protection. That new guideline, however, has encountered widespread opposition from environmentalists and the Administration has reached no conclusion yet.

Some developers and attorneys, exasperated by the complexity of the process and the uncertainty of their land’s fate, say Bush’s “alligators” have skins of red tape.

“Just because you satisfied the U.S. Fish and Wildlife Service doesn’t mean you satisfied the California Department of Fish and Game, which doesn’t mean you satisfied the Coastal Commission or the Corps of Engineers,” said attorney Hugh Hewitt, who represents the Building Industry Assn. of Southern California. “There is a real problem with this.”

Although the process may drag on for years, permission is almost always granted for a development if a wetland is degraded by nearby urban uses or pollution--as most are in Southern California. In exchange, the builder must try to restore or create new marshes, a risky practice that has seen more failures than successes.

Only once have federal officials denied permission to a Southern California landowner to bulldoze a wetland--at a site near Big Bear that contained nesting bald eagles.

Environmentalists complain that loopholes and uneven enforcement leave wetlands unprotected despite the web of rules. The only sure way to save wetlands, they say, is to buy them, but that is a remote possibility in a time of recession, taxpayer revolts and government deficits.

Perhaps no marsh illustrates the difficulty of figuring out what to do with privately owned wetlands better than than Bolsa Chica.

For more than 20 years, developers have tried and failed to build at Bolsa Chica, a 1,700-acre site that contains one of Southern California’s most treasured salt marshes. Now, the Koll Co., which manages 1,400 acres for the owners, Bolsa Chica Properties, is trying to break that logjam with an ambitious proposal to enhance and restore 800 acres of wetlands.

In return, the Koll Co. wants permission to build almost 5,000 homes, mostly on the Bolsa Chica mesa but also on 100 acres of wetlands. The owners have agreed to pay for 40% of the restoration, or $40 million, and are trying to line up others to pay the remaining 60%. A top candidate is the Port of Long Beach, which has been looking for wetlands to replace ones damaged during harbor expansion.

The part of Bolsa Chica that the public now enjoys is only a fraction of the wetlands that exist there. About 300 acres is in a state-owned ecological reserve, about half of which is a restored wetland that provides good habitat for birds and fish. The remaining 1,400 privately owned acres have been cut off from the ocean, degraded by oil pads and polluted by urban runoff, so they provide marginal habitat for birds and other wildlife.

Environmentalists have mixed reactions to the Koll Co. offer. Amigos de Bolsa Chica, a large local group that has spent 20 years staving off development proposals there, recognizes the benefits of the guaranteed protection and paid restoration of 800 acres and has agreed to remain neutral on the plan.

The Koll Co. plan emerged from negotiations between the company and the Amigos group to settle a decade-long lawsuit.

“We won’t speak for it. We’re not in favor of houses at wetlands. But we won’t jump up and down and say no as we have in the past,” said Adrianne Morrison, executive director of Amigos de Bolsa Chica. “We’ll let it go through the normal government process and let it all shake out.”

The decision to remain neutral, she said, was a difficult one for the group’s executive board because Amigos’ credo is to protect all the wetlands at Bolsa Chica.

“You have to kind of bite your tongue on these things,” Morrison said. “On one hand, California has lost 91% of its wetlands and we shouldn’t lose any more, but there are procedures to go through, and landowner rights, and you have to balance that. We’ve been at loggerheads for lots of years, and something had to go forward.”

Others aren’t convinced. A small, fledgling neighborhood group called the Bolsa Chica Land Trust is trying to stop the development by raising money to buy the mesa and wetlands, although it is not for sale.

Most environmentalists have serious reservations about the Koll plan because of a spotty record for restoration projects. Gary Gorman of the Huntington Beach Wetlands Conservancy, a local group which successfully restored the 25-acre Talbert Marsh in Huntington Beach, calls the Koll plan “a crapshoot.”

“What you’re losing may be more valuable than what you’re gaining,” Gorman said. “I’m not a big advocate of mitigation. You’re destroying a known historical quantity and going elsewhere and digging a hole and trying to re-create it.”

Lucy Dunn, Koll’s senior vice president of development, said the plan is a good compromise. “Without the development, you don’t get restoration,” she said. “If you have to choose between the risk of failing and the choice of doing nothing and letting the area further degrade, I’ll take the risk. It’s worth it.”

State and federal officials have already raised red flags, saying they want Koll to avoid the low-lying wetlands and build only on the mesa. The Koll Co. needs the approval of the Huntington Beach City Council, the California Coastal Commission, the state Department of Fish and Game and three federal agencies--the Army Corps of Engineers, the Fish and Wildlife Service and the Environmental Protection Agency.

Teresa Henry, assistant director of the Coastal Commission, said her staff has reached no conclusions yet but would probably recommend against the development because it would violate the California Coastal Act.

The state law, as well as the federal Clean Water Act, prohibits private development on wetlands except for water-reliant projects such as ports. But there are ways to get around those restrictions; the Coastal Commission has started allowing homes and businesses to be built on wetlands if they are “severely degraded” and if 75% of the wetland is protected and restored.

Henry said that although the Bolsa Chica land is in need of restoration, it’s not bad enough to qualify for “severely degraded” status since birds nest and forage there.

She added, however, that the commission of political appointees has an uneven record of following the advice of its staff on wetlands.

Federal officials from the Fish and Wildlife Service and EPA have voiced similar objections, saying all the Bolsa Chica wetlands should be preserved so that government could enhance them whenever money is available.

A report analyzing the environmental impacts of the proposal is due this month, and Koll is expected to start seeking governmental approval in early 1993, starting with the Huntington Beach City Council. Dunn, of the Koll Co., estimated that it will take a year.

When it comes to such negotiating sessions, the government agencies realize that they must walk a fine line or face charges that they violated a landowner’s constitutional rights.

In 1986, the state Coastal Commission banned all residential and commercial development on land known locally as the “Huntington marshes”--a 66-acre strip on the inland side of Pacific Coast Highway stretching from Beach Boulevard to Brookhurst Street. The land was zoned for conservation by the Coastal Commission as part of a coastal land-use plan developed by city officials.

Two investment groups based in Rancho Cucamonga, which bought the land in 1990, have filed a suit in Orange County Superior Court claiming that the city and state should allow them to develop part of it or compensate them for the land at a fair market price.

“They purchased this property with the intent to develop it and have been faced with a situation where all the permitting agencies have refused to even consider the possibility,” said Bill Halle, an Irvine attorney representing one of the investment groups, Pacific Enviro Design.

The lawsuit challenges the constitutionality of the 16-year-old Coastal Act, still considered one of the most stringent environmental laws in the state. Grounds for the suit lie in the Fifth Amendment, which states that private property cannot be taken for public use “without just compensation.”

Until recently, the courts have not been sympathetic with landowners when it comes to government’s right to restrict development. But a month ago, the U.S. Supreme Court ruled that a South Carolina man prohibited from building on his beachfront lots because of state coastal erosion laws must be compensated by the government. The court, in a 6-3 decision, ruled that the owner, who bought his land two years before the laws were adopted, deserved compensation because he was “called upon to sacrifice all economically beneficial uses in the name of the common good.”

Now some attorneys say that decision could be applied to California wetlands law, too, and the Huntington Beach case may provide the first test. Halle said that even though zoning restrictions were in place before the investors bought the land, the constitutionality is still a question and the new Supreme Court decision “throws everything in a state of flux.”

When it comes to wetlands, no one can agree on what constitutes “just compensation.”

The investors at the Huntington marsh say it’s worth $1 million an acre, while the State Coastal Conservancy, an arm of state government that has a longstanding offer to buy it, says its value is closer to $20,000 an acre. The owners paid $31 million--or $465,000 per acre, according to county property tax records.

“There’s a hundred-fold difference over what we usually pay and what the owners think it’s worth,” said Reed Holderman, resource enhancement manager of the State Coastal Conservancy. “We’re nowhere close.”

The true value of the Huntington site probably lies somewhere in between, said Jeff Kauttu, a staff appraiser at Donahue & Co. in Newport Beach, who has appraised several wetland parcels in Southern California.

If there were no laws limiting their use, coastal lots would be worth $1 million per acre, but the environmental restrictions lower their worth to as little as $20,000 an acre in some cases, $120,000 in others, Kauttu said. He believes that between $80,000 and $100,000 is emerging as the fair value of an acre of salt marsh in Huntington Beach and Newport Beach, he said.

The wide gap exists because the value of land depends on what legally can be done with it, yet there is no clear consensus from government on what can be built on wetlands since it has varied from project to project.

“We just have to make our best guess,” Kauttu said. “There’s a chance you’ll get a hotel built on it, and a chance you won’t. From my perspective, I just wish it would be resolved, either way.”

Local environmentalists who have set their sights on trying to buy remaining marshland say that aside from price, one of their biggest hurdles is an apathetic public; most people, Gorman said, think salt marshes are unattractive mud pits, while many local elected officials call them “vacant lots.”

“It’s not the kind of wilderness people think of--trees and timberline--but it’s special and rare, and that gives it beauty,” Gorman said. “People love their beaches; it just takes educating them that there is something worth preserving on the other side of Pacific Coast Highway.”

PORTRAIT: Color graphic describes rich bird and aquatic life of a wetland. A19

Bolsa Chica Proposal

The Koll Co. has proposed to build nearly 5,000 homes on the Bolsa Chica mesa and lowlands, including the bulldozing of 100 acres of wetlands. In return, Koll says it will arrange a $100 million ecological restoration of the remaining 800 acres of wetlands, including construction of an inlet to allow tidal access.