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Regulatory Horror Story Illustrates Need to Block Funding for Waters of the U.S. Rule

WASHINGTON – (RealEstateRama) — A developer’s nearly three-decade regulatory nightmare of attempts to obtain a Clean Water Act permit shows why Congress must take action to prevent the Environmental Protection Agency (EPA) and U.S. Army Corps of Engineers (Corps) final “Waters of the U.S.” rule from being implemented.

During a hearing before the Senate Subcommittee on Fisheries, Water and Wildlife, lawmakers heard how The ESG Companies based in Virginia Beach, Va. has been denied a Section 404 Clean Water Act permit to develop its property for close to 30 years, even though the company has repeatedly gone through proper channels and put forth state-approved plans that would result in no net loss of wetlands.

Testifying on behalf of the National Association of Home Builders (NAHB) before the Senate panel, Valerie Wilkinson, vice president and chief financial officer of The ESG Companies, told lawmakers how land that was acquired by her firm in the 1980s for a multi-use community to address local housing demand still lays undeveloped.

“For almost three decades, we’ve been held hostage by the EPA and Corps, who have continually altered the Clean Water Act 404 permit requirements,” said Wilkinson. “Throughout every step of the process, the rules have changed and new requirements have been added. This is perplexing as the relevant sections of the Act have not changed since 1972.”

After obtaining required zoning approvals from the city of Chesapeake in 1989, the Corps asserted that the property contained jurisdictional wetlands and that a wetland delineation was required. The delineation took years to complete because Corps officials disagreed on the criteria for determining wetlands.

Over the ensuing years, The ESG Companies hired specialists with extensive expertise in environmental geology and wetlands hydrology to develop a new wetland delineation for the Virginia Department of Environmental Quality wetland permit. As part of this process, the firm revised its development plan to further avoid and minimize impacts so that for every acre impacted, two acres of wetlands would be restored and another acre placed in preservation, resulting in no net loss of wetlands acreage.

Though the Virginia Department of Environmental Quality applauded the firm for exceeding typical protective measures and issued a 15-year permit, the Corps concluded that the state-approved wetland delineation, which was the basis for the approved state permit, was not accurate, even though state and federal requirements are the same.

The firm subsequently further reduced the scope of its development plan so that it decreased wetlands impacts by more than 80 percent. However, the Corps failed to budge.

As a result, the Corps has prevented the company from developing any of its 428 acres for 27 years, and it has been forced to spend millions of dollars fighting for this permit.

With the EPA and Corps finalizing a rule that further expands their authority under the Clean Water Act and would put millions of additional acres of land under federal jurisdiction, NAHB Chairman Ed Brady said that this “awful regulatory horror story” could be just a prelude of more to come.

“The waters of the U.S. rule will lead to increased litigation and delays,” said Brady. “Small businesses will not survive under these rules as most do not have the time or resources to fight. Though the Sixth Circuit Court of Appeals has currently intervened and prevented this rule from being implemented, Congress must do its part to block funding for this rule.”

[Editor’s Note: Please contact Liz Thompson at for a copy of the written testimony.]

Elizabeth Thompson