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Developers vs. the Environment

Murky Waters Ahead

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At the end of October, City Council will vote on a measure that has pitted the interests of the development industry against reducing pollution in Charlotte's already-degraded streams and creeks, which flows into Charlotte's drinking-water source.

Polluted water from development and redevelopment sites that the ground doesn't absorb — otherwise known as storm water — runs into Charlotte's stream and creek network. Often containing oil and heavy metals from car fluid as well as trash, such as plastic bottles, storm water is controlled by an ordinance City Council passed in 2007. Numerous stakeholder groups, including environmental advocates and developers, met in 2004 through 2005 to create the Post-Construction Controls Ordinance, which is intended to mitigate storm water around construction sites. This comes after years of mismanagement: Charlotte's stream and creek network regularly receives failing grades from regulators, and mismanaged runoff from development and redevelopment is partially why a national river-conservation group dubbed the Catawba, which all local streams and creeks flow into, the most endangered river in the U.S. in 2008.

The PCO, as the ordinance is called, went into effect in 2008. Its requirements vary depending on which of the local 18 watershed districts — think of them as neighborhoods in which water flows — that storm water from sites runs into. For example, developers working near the Western Catawba Watershed District, which drains into Lake Norman, Mountain Island Lake and Lake Wylie, are required to install water-treatment systems at the site of the pollution, as opposed to off-site, and maintain a certain distance from streams and creeks.

But developers working around transit stations and in "distressed business districts" — or economically distressed parts of town as determined by Neighborhood and Business Services — are allowed to pay a fee of $60,000 per impervious acre, or artificial surfaces such as pavement, instead of installing storm water controls at their sites. The fee goes toward improving the various watersheds around Charlotte, constructing wetlands and pond rehabilitation, among other projects.

In 2011, after developers complained about too much red tape, City Council voted to temporarily extend the mitigation fee, or "fee-in-lieu," to every part of Charlotte in order to encourage redevelopment in the midst of the economic recession. The rate structure also changed — $60,000 per the first impervious acre and $90,000 per additional acre — to deter abuse.

Roughly half of the 105 redeveloping sites that have been eligible to use the fee since 2011 have opted for it. The city "considers this evidence that the fee is set at exactly the right amount to encourage on-site control of runoff, but to also provide a cost saving option to developers."

In April, the city advocated for the fee-in-lieu in a PowerPoint presentation during a City Council Environment Committee meeting. In one of the slides is a sentence from an EPA manual: "Experience has shown that requiring developers to install individual on-site detention and water quality facilities can lead to a regulatory and/or maintenance problem for a local government. Alternative regional solutions may be more efficient and reliable in controlling runoff volumes and pollutant discharges into public stormwater systems and streams." The city argued that even the EPA was in favor of the fee.

But here's the next sentence, which wasn't included in the slide show: "However, on-site systems are typically funded by the developers whereas the general public usually pays for regional systems. An issue of equity arises if general taxpayers or ratepayers have to fund regional solutions to mitigate the impacts of private development projects rather than requiring on-site control."

The EPA says controlling storm water on a construction site is the best way to manage pollution versus allowing pollution to flow through creeks and be treated later. But on-site controls can be expensive and can create cost uncertainty for developers.

Rick Roti, a corporate lawyer and president of Charlotte Public Tree Fund, participated in the stakeholder groups that drafted the Post-Construction Control Ordinance. When the fee-in-lieu was added, he enlisted the help of then-mayor Anthony Foxx to fight what he and many others considered too much involvement from the development community in the ordinance.

"Even though they [developers] sat on the committee ... they immediately started working against adoption of the ordinance and trying to weaken it," Roti said. "They started calling politicians, working with [city] staff, working to provide information on why it was such a bad idea." The fee was added. "The development community has more money, more resources, than we do."

Before it was supposed to sunset in April of this year, City Council directed Storm Water Services to determine whether to extend the fee-in-lieu another five years and present their findings to the Council's Environment Committee in August.

Staff determined that the fee should be extended but, as a compromise, added that the city could require filters around vehicle-heavy areas, like parking lots, that would capture what they refer to as "secondary pollution," or non-chemical runoff like trash. Otherwise, the trash ends up in streams and creeks and becomes a very visible problem. (Storm Water Services, which focuses on controlling primary pollution, such as chemicals, says it has no way of determining how much secondary pollution winds up in streams and creeks.)

At their meeting in August, Environment Committee members David Howard, a Democrat, and Republicans Ed Driggs and Kenny Smith endorsed city staff's recommendations to extend the fee-in-lieu, which will come to a City Council vote on Oct. 27. Chairman John Autry voted against the extension, and member Claire Fallon was not at the meeting.

As for the filters, arguing it was the first time committee members had ever heard of them, Howard, who works for an affordable-housing developer, asked staff to provide more information on their technology during the next meeting, which occurred Wednesday, Sept. 10.

The Environment Committee, a City Council subcommittee tasked with protecting quality of life as it relates to the environment, could have voted to endorse the filters during the meeting on Wednesday. Instead, Smith and Driggs favored subtracting from the fee-in-lieu the cost of incorporating filters into a construction site. During the discussion, Driggs asked an attending representative of REBIC, a powerful lobbying group in Charlotte that represents the real estate and development industry, for his opinion. "We prefer to have a clean extension of the mitigation fee but we can live with the recommendation [to implement filters]."

During his presentation Daryl Hammock, assistant division manager at Storm Water Services, said the city could live without them. "Primary pollutants are what we're held to account for. If we want to do it [the filters] as a solution, that's great. If we don't want to do it at all, that's great too." The general consensus is that the filters are dead in the water.

Hammock, who is tasked with restoring Charlotte's creeks and streams, said after the meeting that the fee-in-lieu is a sound way to balance development and redevelopment in Charlotte with protecting the environment. "It's better environmentally, under current economics, for the developers to pay a fee than it is for them to control on site," he said. "For some developers, cost doesn't matter much. For some developments, cost is everything."

He offered a hypothetical example of someone redeveloping a restaurant in a shopping mall in a part of town with fewer such projects, like east Charlotte. "You need to make sure costs are held as low as possible."

Businesses that have taken advantage of the fee-in-lieu include retailer Cato during a facility expansion, a bank, a 307-unit residential apartment building and various gas stations and auto malls.

After the late August meeting in which the Environment Committee endorsed extending the fee-in-lieu without the filters, the Catawba Riverkeeper, Sustain Charlotte, the Sierra Club and Charlotte Tree Fund penned a letter to City Council strongly urging against the full body's approval of the extension.

"The vast majority of damage to our waterways is caused by runoff from impervious areas," the letter said. "Our population growth has resulted in exponential growth in impervious cover and runoff that has turned many of our local streams into muddy, contaminant-laden ditches.

"The PCO's fee-in-lieu provision was meant to be a temporary measure to encourage redevelopment during the economic downturn. Why do we need to extend it further? Development is booming again in Charlotte, and with increased traffic in areas now seeing redevelopment, now is the time to ensure that sites implement post-construction storm water measures that will rehabilitate our waterways."

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