As of March 14, 2012, the California Department of Fish and Game (DFG) announced that budget cuts have temporarily stopped the agency’s ability to review and approve new mitigation banking proposals statewide. The State budget cuts have created a backlog and the Department has slowed the process. DFG did acknowledge in their press release and website that mitigation banking is an important environmental tool and hopes the pause in mitigation land banking activities is short-lived. They will sign and complete bank agreements that are close to being completed, yet they didn’t indicate what it considers “close.” DFG will not, however, be approving new banking programs and stated it may not have the capacity to process major amendments to existing agreements.
This creates a great problem for smaller and new mitigation banking firms, which lack the capital to process and buy longer term. Some of the smaller mitigation bankers may have spent larger sums of capital on areas where the environmental benefits are not in delicate ecosystems for endangered plants and animals. These land bankers were buying larger parcels of land in the hopes that developers will buy the land to fulfill the environmentalist concerns. These smaller bankers will have to sell some of their land now to more deep pocket competitors or investors to stay afloat.
The mitigation business is similar to land banking business, where you buy vacant land and hold the land for buyers who need the land for later development. In mitigation banking the future buyers are developers who develop near cities growing areas and must buy “credits” to satisfy environmentalist and the state in order to develop their land today. An example would be a Mall developer, a solar or wind farm will have to buy large swaths of land and donate it to the state to preserve the land forever. Most of these parcels are in endangered animal and plant habitats like that of the desert tortoise, ground squirrel, and Joshua tree woodlands in Southern California.
We at vacantlanddeals.com have been working with several mitigation bankers who are buying land for current developers, or buying land now to mitigate bank it for future developer plans. We have hundreds of land owners on our list of potential sellers who can benefit from this mitigation wave. Contact us and we can help introduce your land to the larger mitigation bankers. Lancaster and Palmdale areas of Antelope Valley, and San Bernardino County are large target areas for land banking and mitigation banking needs. Some of the larger mitigation bankers can wait until the DFG completes its backlog or hires more employees to handle the traffic.