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St. Louis County Board approves Sax-Zim land exchange

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FLOODWOOD — The St. Louis County Board on Tuesday gave final, unanimous approval to its part in a major land exchange that will establish the largest private wetland mitigation bank in the nation.

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The deal, in the works for more than a year, will see the county trade about 6,095 acres of county-managed, tax-forfeited land in the Sax-Zim Bog area for 3,118 acres of former Potlatch forestland in other areas of the county.

The appraised value of the land exchange is more than $3.2 million.

Ecosystem Investment Partners will acquire the bog land and plans to restore it to its original wetland state, before it was drained for farming, and then sell credits for wetlands lost elsewhere in the Northland. The Baltimore-based company establishes private wetland banks used to offset wetlands lost during construction projects, such as highway construction or mine development.

Combined with 3,600 acres of private land that Ecosystem Investment Partners already has purchased in the Sax-Zim area, and another 11,637 acres of school trust land that the Minnesota Department of Natural Resources has agreed to include in the deal, the new wetland bank would cover more than 21,000 acres — or 33 square miles — in what’s already called among the most important bird habitat in Minnesota.

The DNR also will get forestland in exchange for its part of the bog trade. The state Land Exchange Board is expected to approve both the DNR and St. Louis County land trades at its Sept. 9 meeting, making the deal final.

Ecosystem Investment Partners could begin restoration work on the bog land in 2015, restoring the swampy area drained in the early 1900s in failed efforts to create farmland. The company already is working to establish the land as an official wetland bank with both state and federal Army Corps of Engineers wetland regulators.

Company officials have said it would be the largest such wetland bank the U.S. The for-profit company has received national attention in recent months for other work, such as environmental restoration of Louisiana wetlands still recovering from the 2010 BP oil spill.

The Minnesota deal was brokered by the Conservation Fund, a national nonprofit conservation group that is buying the forestland from Potlatch, trading it to the county and DNR for the bog land, and then selling the ditched bog land to Ecosystem Investment Partners to restore.

“Not only is it going to see the land restored at the (Sax-Zim) site, but we’re going to keep that (Potlatch) forestland under public management, in large blocks, and keep it undeveloped rather than sold off in parcels. That’s another important factor for forest wildlife,” said Steve Hobbs, Minnesota state director for the Conservation Fund.

“It makes for better habitat management, better forest management and better recreation access,” said Tom Duffus, the Conservation Fund’s Midwest region vice president.

Hobbs said the bog land will be protected with conservation easements that require it be managed sustainably and remain open to the public, as well as never developed. Ecosystem Investment Partners also will be required to meet restoration goals, he said.

County officials note that the private wetland company will pay taxes on the bog land while the newly acquired Potlatch land will continue to provide trees for the region’s forest products industry and tree-sale revenue for the county.

“This just makes sense for us to do,” said Frank Jewell, the county commissioner representing central Duluth. “The bog wins, the forest wins, wildlife wins … and the county wins. … Development is going to happen whether we do this or not, so let’s keep the benefits here in the county.”

Some groups criticized the land swap when it was made public last year, saying the bog land already is slowly healing on its own without formal restoration and that the creation of a wetland bank will lead to the destruction of other, more pristine wetlands across Northeastern Minnesota to make way for new mining and other development.

Others suggested the value of the bog restoration wasn’t high enough to qualify as a wetland bank.

There was no opposition, however, at either a June hearing on the land swap or at Tuesday’s board meeting.

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