The owners of a controversial wetlands project in Clay County dropped their appeal Thursday of a decision denying them a new permit from the state Department of Environmental Protection.
The surprise move vindicates the DEP's top wetlands expert, Connie Bersok, whose objections to the project last year led to her being relieved of duty, investigated and taken off the case. It will also cost the owners millions of dollars they had expected to make from the project.
The permit was for the Highlands Ranch Mitigation Bank, created in 2008 when a politically influential 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 next to Jennings State Forest.
The company planned to turn the plantation into a business that attempts to make up for wetlands wiped out by new roads and development. At stake: millions of dollars in wetland credits that can be sold to governments and developers when their roads, houses and other projects wipe out marshes, swamps and bogs.
Although records show Highlands Ranch planned to do little to restore any wetlands, its owners sought a permit with 688 credits from the St. Johns River Water Management District. The district's staff approved only 193, a difference worth millions in a market where credits have sold for up to $100,000 each.
Unhappy, Highlands Ranch's owners filed a legal challenge. It failed, as did an attempt to get the Florida Legislature to change the rules.
So Highlands Ranch sought a new permit from a different agency, the DEP. They wanted a permit that offered 425 credits. The problem, according to a memo last year from Bersok, was that the owners wanted lots of wetland credits for land that isn't wet, using a method that no one else used.
The owners hired a lobbyist with connections to DEP Secretary Herschel Vinyard Jr. to persuade the agency to give them what they wanted. Then DEP Deputy Secretary Jeff Littlejohn, an engineering consultant who had recently been hired by Vinyard, issued a memo ordering a change in the way credits were calculated. The first draft, Littlejohn said, was written for him by the attorney for Highlands Ranch.
Bersok continued raising questions about the project, questions that the lobbyist objected to. After being told by Littlejohn to ignore the rules she had followed on other permits, Bersok wrote, "I hereby state my objection to the intended agency action and refusal to recommend this permit for issuance."
She was put on paid leave and subjected to an investigation into whether she was leaking damaging information about the permit to environmental activists or reporters. Although Bersok was cleared, the Highlands Ranch case was taken away from her. DEP officials then approved a permit containing just what the owners had wanted.
But the Florida Wildlife Federation filed a legal challenge. In April, after hearing testimony from Bersok and other DEP employees, a judge with the state Department of Administrative Hearings ruled the permit should be rejected.
The judge said Bersok gave the only "credible and reliable" testimony and noted that no one at the DEP could explain how they came up with the numbers used in the permit. He blasted Littlejohn and the DEP for creating a new approach "developed by the department and Highlands Ranch, without opportunity for public participation or input."
In June, Vinyard agreed with the judge, reversing the DEP's decision on the permit because Highlands Ranch "did not provide reasonable assurance" that its approach would work, as required by law. The owners took their case to the 1st District Court of Appeal in Tallahassee, but on Thursday filed a three-paragraph motion dropping the case. Their attorney, Frank Matthews, did not respond to a request for comment.
According to Florida Wildlife Federation attorney Tom Reese, that means Highlands Ranch is now stuck with the 193 credits it got back in 2010, before it first tangled with Bersok.
Craig Pittman can be reached at [email protected]