A controversial wetlands project that already has been the focus of two inspector general investigations was granted its permit last week by the state Department of Environmental Protection.
The Highlands Ranch Mitigation Bank project has been embroiled in controversy since May, when the DEP's top wetlands expert, Connie Bersok, refused to approve the permit and subsequently was suspended.
Bersok contended that the project would be bad for the environment. Her bosses suspected she was leaking damaging information about it to activists and reporters, but an inspector general's investigation cleared her.
Bersok, a longtime DEP employee with a stellar work record, did not sign the just-issued permit. Instead, it was signed by her division director, Mark Thomasson, a recent DEP hire who at one point was ready to oust Bersok for her opposition to approving it. DEP spokeswoman Dee Ann Miller said Bersok was replaced by one of her bosses as the permit reviewer while she was on suspension.
An official statement posted on the DEP website said the permit is "the first of its kind … pilot project intended to address widely reported inconsistencies" in the permitting for similar projects. "This proposed project provides reasonable assurance that the environment will be protected."
However, Jerry Phillips, a former DEP attorney who now heads up the Florida chapter of the group Public Employees for Environmental Responsibility, said the permit was the end result of having "a secretary who is beholden to industry and a deputy secretary who is beholden to industry."
Highlands Ranch is a wetlands mitigation bank. It's supposed to work like this: A would-be banker buys pasture or forest that used to be a swamp and restores the wetlands. Regulators calculate how many wetland "credits" the banker has earned. The banker can sell those credits to customers who need to make up for filling in a swamp, usually for development.
The Highlands Ranch Bank was created in 2008 when a private equity firm named the Carlyle Group formed a joint venture with a Jacksonville company, Hassan & Lear Acquisitions. They spent $15 million buying a 1,575-acre pine plantation in Clay County next to Jennings State Forest.
Although records show Highlands Ranch planned to do little to restore wetlands, its owners sought 688 credits from the St. Johns River Water Management District.
The district approved only 193 credits, a difference worth millions in a market where credits have sold for up to $100,000 each. Highlands Ranch filed a legal challenge, but lost. It attempted to get the Legislature to change the rules, but that failed too.
But then DEP Deputy Secretary Jeff Littlejohn, an engineering consultant who had recently been hired by the agency, issued a memo ordering a change in the way credits were calculated. The first draft, Littlejohn said in an interview, was written for him by the attorney for Highlands Ranch.
Highlands Ranch then sought a new state permit with 425 credits, figuring that Littlejohn's memo would pave the way to success. Instead, Bersok kept raising questions and objections.
In December, Littlejohn met with Highland Ranch's lobbyist, Ward Blakely, who had a prior connection with Littlejohn's boss, DEP Secretary Herschel Vinyard. In his notes, Littlejohn wrote, "Connie dug in, doesn't believe we should be reviewing the application." He also noted Blakely's complaint that Bersok's questions seemed "punitive."
Littlejohn told Bersok to take a new approach, one suggested by Highland Ranch's environmental consultant. Instead of requiring detailed plans for how Highlands Ranch would help the environment, as previous mitigation banks were required to do, he wanted her to set goals for the bank. That way Highlands Ranch would get a lot more credits to sell, but it would first have to prove it had changed the landscape enough to earn them.
Littlejohn called it a "performance-based pilot" for all future banks, a concept he said was approved by Vinyard. DEP officials have repeatedly refused to make Vinyard available to the Times to talk about Highlands Ranch.
Bersok went along with Littlejohn's order, but continued raising objections to giving hundreds of credits for land that was mostly dry, and without what she called "a reasonable assurance" that its restoration plans would work.
The new permit not only gives the project the 425 credits its owners had sought, it also waives the requirement that they show they are financially capable of building what they promised. The credits will be released in increments based on a monitoring plan that so far does not exist.
"The pilot permit will give us an opportunity to meet the needs of local developments while performing at a new level of responsibility and stewardship of our environment," managing partner Marc El Hassan said in a statement released by the company.
Craig Pittman can be reached at [email protected]