Land-use issues to hold
the industry's attention next year

Smart Growth, Comm 83 among
the issues to take center stage

By Jeremy Harrell
Daily Reporter Staff

The construction industry went to work in 2000, joining and even influencing debate on several key development issues.

Now that many of the bills have become law - a list that includes Smart Growth, Comm 83 and wetland tradeoffs - the industry can focus on how those laws apply to construction projects and how they have opened doors for expansion.

But nonpoint source pollution, which could be the most significant issue for 2001, is still under debate. The industry is closely watching the Department of Natural Resources as it develops the standard. The outcome, which likely won't be realized until 2002, could trump the combined impact of all other development issues.

Residential development

Smart Growth and Comm 83 were hard-fought items approved in the last legislative session - and, in fact, Comm 83 is a battle still being waged in court.

But their passage will most likely not have an immediate effect on the industry, said Jerry Deschane, deputy executive vice president of the Wisconsin Builders Association, Madison.

Smart Growth has a 10-year phase-in period, meaning that local units of government don't have to make land-use decisions until 2010. And, in many cases, municipalities have been preparing for the law since discussion first entered the Legislature five years ago, Deschane said.

"There will no immediate impact because communities were planning before, during and after Smart Growth," he said. "We won't begin seeing the benefits for another four years."

Shortly after Smart Growth passed through the Capitol, Deschane said, there was concern that communities would enact land-use moratoria - which essentially shut down development for months and even years - to give themselves time to develop new plans. But there is a slim chance that will happen, he said, citing the stringent criteria for enacting moratoria.

"We won't see a lot more moratoria under Smart Growth," Deschane said. "A community has to show a very strong need, regardless of the Smart Growth law."

Communities acting quickly to reap "Smart Growth dividends" could provide the only immediate movement on the Smart Growth front, said Dan Thompson, League of Wisconsin Municipalities executive director.

"If the Legislature follows through by creating a program that rewards community action, then we may see some immediate impact," he said.

Passage of Comm 83, which expands the kinds of septic systems used in residential construction, was a victory for the state's towns and homebuilders, but Deschane cautioned industry observers from leaping to the conclusion that it would result in a land grab. The market for new homes is leveling off after several years of up-ticks, he said, and Comm 83 won't suddenly generate new homeowners where none existed before.

"Comm 83 remains an option, but it doesn't create demand," he said. "Develop-ment trends are development trends, and they have nothing to do with the way you flush your toilet."

Mike Corry, Department of Commerce Buildings Division administrator, agreed, noting that homebuilding projects have more to do with economic health than with septic codes.

"Housing starts are generally governed by interest rates and the economy, not by Comm 83," he said. "There will probably be little change for the construction industry."

Thompson said the league, which is spearheading a lawsuit in Dane County Circuit Court challenging Comm 83, has asked the Department of Com-merce to go back to the drawing board to write new legislation. But he said regardless of whether Commerce gets its way - and he said it probably would - the law will only have an effect on development in rural areas.

"It will not impact how cities and villages develop," Thompson said. "It has very little impact on their economic development."

Brownfield development

Redevelopment of brownfields, however, marks one area that will affect urban development. The DNR, starting last year, gave grants to cities and villages to help them clear brownfields and ready them for development.

"Many of the changes in our approach to brownfields have already taken place," said DNR brownfield specialist Percy Mather. "Much of the work now is about publicizing what we've done."

The DNR gave more than $1 million in grants to dozens of communities around the state in 2000, and Mather said the agency has begun poring over applications in order to repeat that feat in 2001.

The grants help communities clean up brownfields by footing some of the costs for removing underground storage tanks and demolishing structures on blighted property. With sites stripped of impediments and certified by the DNR, communities can go about recruiting developers for various types of projects - from residences to commercial buildings to parking lots.

"In larger communities, they have developers lined up, but what's holding them up is an unwillingness to take down the site," Mather said. "A number of communities have been good about seeking out grants, so the next person who comes into town looking to develop doesn't have to dip into his own pockets to make it happen."

It's that type of cooperation between the public and private sectors that make brownfield developments so appetizing, said Dean Baum-gardner, vice president of Heartland Properties Inc. in Madison. He said Heartland typically works on a couple of brownfield development sites every year, and the more a community prepares the sites for development, the more enticing the project for the developer.

"One of the issues when you're doing brownfields is that you need to make sure it's clean," Baumgardner said.

"Communities are starting to recognize that they need to step up and work to provide some financing for that." Brownfield redevelopment ventures are likely to become more frequent as communities look to in-fill projects in response to Smart Growth mandates, Baumgardner said.

"It ties in well with Smart Growth because a city is redeveloping existing sites within a community," he said.

"Interest will certainly increase, but it's expensive, and whether the dollars will increase is another question."

Developing development

While the industry in 2001 keeps one eye trained on development opportunities, the other will be cocked on the progression of the DNR's nonpoint source pollution standard.

If passed, the law could affect the width of streets in new residential subdivisions, the amount of land needed for new development, the increments road builders can work on at any one time and, in general, how the industry and communities deal with storm-water runoff.

"This has the potential to be far more significant than anything else," Deschane said. "It could change the paradigm from the basic runoff model of water going into a sewer system into percolating all storm water into the ground."

The runoff standard, which the DNR is forming to comply with federal mandates, would force construction companies to reduce sediment runoff at work sites by 80 percent, said Russ Rassmussen, DNR runoff management section chief. Agency officials said the work site runoff standard will pose few problems because most firms operate under the DNR's "best management practices," which adequately address the federal regulations.

But the runoff standard could force the state's road builders to limit the amount of work that can be done at any one time, said Tom Walker, executive director of the Wisconsin Transportation Builders Associa-tion, Madison. This would dramatically increase the price tag for road projects, he said, because it would require horizontal construction projects - like road building - to proceed in a piecemeal fashion.

"I've seen some pretty astounding cost estimates," he said. "With horizontal construction, the most cost-effective way is to open projects all at once. That allows the various contractors to operate simultaneously, which maximizes the use of equipment and minimizes the amount of mobilization required. Otherwise, the unit costs could go through the roof. The DOT is estimating costs at $70 million."

The proposed standard's post-construction infiltration requirements could pose an even greater problem. The standard would require projects to reduce runoff by 80 percent after a project is completed, and the only way to accomplish that is to build detention ponds in new residential housing areas, Deschane said.

"If they say you have to build wet or dry detention ponds, it will increase the amount of land needed for development by 3 to 8 percent," he said. "That's a recipe for sprawl."

And, Deschane added, the costs associated with building new residential developments would spiral upward. The WBA has estimated the cost of building wet detention ponds at $70,000 per acre. Road construction projects would also have to comply with the post-construction requirements, which would necessitate wet detention ponds at regular intervals along the roadside.

Rassmussen said the DNR is also considering scaling back the lot sizes affected by the proposed rule from five acres to one acre to comply with a mandated 2003 deadline.

Aside from the costs associated with the proposed nonpoint source pollution standard, Walker questioned the feasibility of the rule.

"The jury's still out on the reasonability of the regulations," he said.

The DNR introduced a draft of the proposed rules last spring and sent the bill out for public hearings and comment in April and May. The agency went back to Madison to incorporate suggestions into a new draft of the standard.

In January 2001, the DNR will present the Natural Resources Board with the reworked bill, and the board will again hold a series of public hearings in the spring, said Al Shea, DNR watershed management bureau director. The NRB could introduce a bill to the Legislature next fall.

Wetland development

Also on the horizon for the coming year is the DNR's new standard for wetland mitigation, a law passed in the last session that takes effect in June 2001. The law essentially allows developers to build over a wetland as long as they create a new wetland in the same watershed region.

Deschane said the trade-off rule is an important step in lowering development costs because the law speeds up a process that is often mired in a bureaucratic tangle.

"We hope it will mark a small but significant change in terms of getting wetland permits more quickly," Deschane said. "It will decrease the time and money needed to get wetland permits."

Walker said developers and builders must mitigate at a level of two to one - two acres of mitigation for every acre paved over. But it's a fair price to pay for the new avenues the mitigation creates, he said.

"It's a recognition that transportation has to be responsive to the problems it creates," Walker said.

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