Sacramento-San Joaquin Delta faces deadline for restoring fish habitat

04/22/2012 12:00 AM

04/22/2012 12:59 PM

Chipps Island is packed with stories. The 1,000-acre tract in the Sacramento-San Joaquin Delta has been the stage for a variety of human scheming and struggling.

Legend has it the island once was owned by the Italian Mafia, and a spat there between mobsters resulted in one being run over by a bulldozer.

The island was also, until 1956, the terminus of a railroad that carried produce and people from Sacramento. A ferry then floated whole train cars across the Sacramento River to Pittsburg in an era before big bridges.

If John Sweeney has his way, the next story will look more like the first one, when Chipps was among hundreds of natural islands in the Delta and a vital nursery for fish.

Sweeney, managing partner of a duck-hunting club that owns most of the island, hopes to sell it in what may be the Delta's biggest modern land rush: a stampede to buy land for fish habitat.

State and federal water agencies face a number of hard deadlines over the next seven years to restore at least 17,300 acres of fish habitat.

That would seem a modest task, given that the Delta as a whole is 740,000 acres. In fact, though, few parcels are suitable for the kind of habitat required, given the unique needs of the Delta's native fish.

As a result, land with the right characteristics may soon be in very high demand.

"It's going to create a massive gold rush in the marsh," said Sweeney. "No one out here who owns duck clubs knows what they are sitting on."

Only time will tell if that proves true. But one thing is sure: The scale of the restoration required, and the urgency to get it done, is unprecedented in the Delta. Those involved will be attempting to take entire agricultural parcels – whether farms or duck clubs – and re-engineer them to let the tide back in.

In the process, they will be reversing 150 years of labor and engineering that transformed the Delta into a farming mecca.

Such restoration work has been talked about for decades, and a few small projects have been completed. Now, federal fishery agencies have set firm targets, and the Endangered Species Act is their weapon.

The orders, known as biological opinions, require the state Department of Water Resources and U.S. Bureau of Reclamation to restore habitat to atone for killing fish and altering habitat, an unavoidable side effect of pumping millions of acre-feet of water from the Delta every year.

If the deadlines are not met, the water agencies will find themselves in violation of the state and federal endangered species acts, and subject to water cutbacks. This would be costly and disruptive to the 25 million Californians who depend on Delta water.

The deadlines require 8,800 acres of tidal habitat to be restored by 2019 for Delta smelt and longfin smelt. Another 8,500 acres of floodplain habitat must be restored for salmon by 2016. An equal amount must be restored after that, totaling at least 17,300 acres of floodplain. In some cases, the agencies will be able to count the acres in one project toward all three species.

"I don't think there's been anything on this scale before," said Dennis McEwan, a biologist employed by the state for 25 years and now chief of the mitigation and restoration branch at the California Department of Water Resources, one of the agencies bound by the restoration deadlines.

"It's going to be huge what we do here," McEwan said. "It is very, very significant in trying to restore the ecological health of the Delta."

A return to tidelands

The agencies have vowed to work only with willing sellers to find all the land they need. The real challenge, however, will be finding willing sellers who have the right kind of land.

The Delta in which smelt and salmon evolved was originally a mostly tidal place. There were natural islands and even "levees" caused by natural sediment deposits, but they were small and routinely overflowed during storms and high tides.

This constant washing of the land was a kind of natural farming that produced huge blooms of phytoplankton and zooplankton – small plants and animals in the water column that are the basics of fish food. Tidelands were "the breadbaskets of the Delta," McEwan said.

Because the Delta was converted to farms, it is now a very different place. Levees restricted water to narrow, fast-moving channels. Many of today's islands have subsided 20 feet or more below sea level, a result of native peat soil decomposing over time.

As a result, many of these islands, even if flooded, would not make very good fish habitat. The water would be too deep to allow tidal action.

So as water officials search for land to restore, the No. 1 criteria is elevation: Is the property at the right elevation to be swept by the tides – both now and in the future as sea level changes?

It turns out there aren't very many of those places left. DWR has projects in the pipeline that meet about half the 8,000-acre smelt requirement. It is actively searching for another 4,000 acres.

Local water agencies that depend on Delta water sense the urgency of the situation. In 2009, they formed a group called the State and Federal Contractors Water Agency specifically to "pitch in" to help get the habitat projects done, said Byron Buck, the agency's executive director.

"We knew it was going to be tough for the state and federal governments to do it alone," Buck said. "These are complicated projects, and they have a lot of local issues to overcome. We are looking all over the Delta where there are willing sellers and where the land is in the right location."

Buck's group includes the state's largest and most politically powerful water agencies that depend on Delta water, including the Metropolitan Water District of Southern California, and Westlands Water District in the San Joaquin Valley, the nation's largest farm irrigation agency.

The agency plans to partner with DWR on the restoration projects. An agreement to guide that relationship is close to being signed.

The actual restoration work ranges from easy to wickedly complicated. If conditions are perfect, the habitat will create itself once water flow is restored by breaching levees.

Perfection is rare. Most properties will require costly excavation to create meandering habitat channels – at carefully engineered depth and elevation – to restore the right water flows.

Potential for speculators

Every restoration project will be planned in a public process, including environmental impact reports. The first in the pipeline is called Yolo Ranch, a parcel in the Yolo Bypass purchased by Westlands Water District in 2007.

Yolo Ranch is expected to yield 1,205 acres of tidal wetland habitat, Buck said. A draft environmental impact report is expected this summer, at which point the "local issues" Buck mentioned will come to the fore.

The land is in Yolo County, where the Board of Supervisors in 2010 passed a moratorium on habitat projects. Supervisor Mike McGowan said the county was feeling "muscled" by the water agencies and the moratorium was intended to force them to the table. It expires in November, and McGowan said the county is prepared to cooperate as long as its interests are accommodated. These include flood protection and the preservation of agriculture.

"We are not religiously opposed to habitat restoration in Yolo County," he said. "But you're going to do it the Yolo way, or we will resist you."

Besides environmental studies and local government permits, each habitat restoration project also requires permits from an alphabet soup of other agencies. These include the U.S. Army Corps of Engineers, the Central Valley Flood Protection Board and the State Water Resources Control Board.

"You need every single permit, and every one of them is a nightmare," said Tom Cannon, who formerly built such projects for Wildlands Inc. The company's business is to restore habitat and then sell so-called "mitigation credits" to developers at whatever the market will bear – sometimes more than $100,000 per acre.

The water agencies have vowed to do their own restoration work rather than buy credits. They believe they can save money by doing the work themselves, and estimate acquisition and development costs at $20,000 per acre. Total project costs for 8,000 acres of habitat are estimated at $205 million, to be funded largely through water rates.

McEwan acknowledged the uncertainty in that number.

"A lot of these properties are going to be really valuable," he said, "so there is a potential for land speculators to come in and buy the property in front of us, then sell it back to us at a really increased cost."

Many Delta properties are richly encumbered by historic multifamily partnerships, natural gas drilling rights, utility and transportation easements and levee maintenance obligations. Clearing all that up to complete a sale is costly and time consuming.

Which is why John Sweeney considers Chipps Island so attractive. The partners own three-fourths of the 1,000-acre island, which they spent several years consolidating out of 18 disparate parcels. They also evicted squatters and removed derelict buildings.

Sweeney recently advertised the island online and has discussed a sale with some of the water agencies. He is frank about wanting to profit from such a deal, but said that isn't the only motivation for him and his partners.

"They're much more willing to look at a project, even if it's less return, because we're doing something good for the environment," Sweeney said. "It will be bought. The returns, when they start to happen, could be quite good."

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