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Developers, seeking to gain from building boom tied to Ford plant, push for weaker wetland rules

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Developers, seeking to gain from building boom tied to Ford plant, push for weaker wetland rules

Feb 28, 2024 | 6:00 am ET
By Anita Wadhwani
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Developers, seeking to gain from building boom tied to Ford plant, push for weaker wetland rules
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Ford BlueOval City, photographed while under construction in April 2023. (Photo: John Partipilo)

A high-stakes battle over the future of Tennessee’s wetlands has been playing out behind closed doors in recent weeks, with developers and environmental groups furiously lobbying on opposite sides of a bill to drastically roll back regulations.

The bill by Collierville Republican Rep. Kevin Vaughan would limit state oversight over more than 430,000 acres of Tennessee wetlands. That’s more than half of the state’s critical ecosystems, which serve as a bulwark against floods and droughts, replenish aquifers and are prized by hunters, anglers and nature lovers.

Environmental groups warn that the proposed bill, if enacted by the General Assembly and signed into law by Gov. Bill Lee, could inflict irreparable harm on future generations.

“The proposed legislation favors the interests of developers over the safety of future flood victims and pocketbooks of Tennessee taxpayers,” said George Nolan, senior attorney and director of the Southern Environmental Law Center in Tennessee.

“Once a developer fills and paves over a wetland, it is gone forever. This is no time to repeal laws that have protected our wetlands for the last 50 years,” he said.

Vaughan called the measure an overdue check on red tape that costs developers time and money; he has denied weakened wetland regulation could lead to increased flooding.

The proposed legislation favors the interests of developers over the safety of future flood victims and pocketbooks of Tennessee taxpayers.

– George Nolan, Southern Environmental Law Center

He has accused state environmental regulators of “bureaucratic overreach” and “unnecessary inflation on the cost of construction” and pointed to the urgent need for relief from regulation given a building boom in the region he represents, where a new Ford plant is going up in Stanton just 40 miles from the offices of Township Properties, Vaughan’s real estate and development company.

“My district is one that is different from a lot of other people’s districts. We’re in the path of growth,” Vaughan told lawmakers.

Lee’s office did not respond to a question about whether he supports the bill.

A land rush in west Tennessee, where wetlands abound

There is perhaps nowhere else in the state where tensions between fast-tracking development and protecting wetlands are higher than west Tennessee.

BlueOval City, Ford Motor Company’s $5.6 billion electric truck plant, has spurred a land rush in the region, with developers buying up properties, designing subdivisions and erecting apartment complexes at a fast clip ahead of its 2025 planned opening.

Restaurants, hotels and grocery stores are springing up to accommodate an expected 11% increase in population by 2045 in the 21-county region surrounding the plant — making it the fastest growing area in Tennessee.

West Tennessee counties also have some of the largest shares of wetlands that would lose protections under Vaughan’s bill.

The bill targets so-called “isolated wetlands” that have no obvious surface connection to a river or lake. Wetlands, however, rarely stand alone, often containing hidden underground connections to aquifers or waterways.

The ten Tennessee counties with the largest share of at-risk “isolated” wetlands are located in west Tennessee, within commuting distance of the Ford plant.

Haywood County, where the plant is located, has more than 57,319 acres of wetlands that could lose protections under Vaughan’s bill — nearly 17% of all land area in the county, according to 2019 data from the U.S. Fish and Wildlife National Wetlands Inventory compiled by the Southern Environmental Law Center.

In Shelby County, where Vaughan is based, 35,482 wetland acres are at risk – 7% of the county’s total land area.

Ford megasite atop ‘recharge zone’ for underregulated Memphis Sands aquifer 

The region also lies atop the Memphis Sand Aquifer, the primary water supply for urban and rural communities, and farmers in west Tennessee. Wetlands serve to recharge and filter water that supplies the aquifer.

“This is such a unique moment in west Tennessee history,” said Sarah Houston, executive director of the Memphis advocacy group Protect Our Aquifers, noting projected growth data that shows population increases of 200,000 or more in the next two decades.

“But when you’re removing protections for wetlands, you’re cutting out that deep recharge potential for all the water supply West Tennessee relies on,” she said.

Vaughn’s business among those to profit from building boom

Developers who wish to fill in, build on or otherwise disturb wetlands must first apply for a permit from the Tennessee Department of Environment and Conservation, or TDEC, which can approve or reject the plans.

The process can prove costly; companies must hire lawyers, hydrologists and other experts before filing a permit. And if they get one, TDEC can require developers to pay expensive mitigation fees for disturbing wetlands — potentially adding tens- or hundreds-of-thousands of dollars to construction costs. The fees are used to preserve wetlands elsewhere, balancing out what is lost by a single project. The process can add months, or more, to construction timelines.

Vaughan has spoken openly about ongoing frustrations in his own business to comply with the state rules, describing TDEC regulators as overzealous in defining marshy or muddy lands that are created by tractor ruts or runoff as wetlands.

State records show that Vaughan as recently as December received state notice that a project he is spearheading contains two wetlands: one at 1.42 acres and another at 1.51 acres.

Rep. Kevin Vaughan, R-Collierville, a developer, received a letter from the Tennessee Department of Environment and Conservation in December notifying him of wetlands on a project he’s leading. It’s not the first time he’s butted heads with TDEC.

Given the presence of wetlands, “any alterations to jurisdictional streams, wetlands, or open water features may only be performed under coverage of, and conformance to, a valid aquatic resource alteration permit,” the Dec. 8 letter from TDEC to Vaughan said.

The project, a 130-acre site of the proposed new headquarters for Thompson Machinery, Vaughan’s client, will have to incur costly remediation fees should its permit to build atop wetlands be approved by TDEC.

It’s one of multiple development projects that Vaughan has been affiliated with that have butted into TDEC wetland regulations in recent years.

PAC money flows in from west Tennessee

Vaughan also represented Memphis-based Crews Development in 2019 when the company received a notice of violation for draining and filling in a wetland without permission.

Vaughan did not respond to questions from the Lookout, including whether his sponsorship of the bill presents a conflict of interest.

He is not alone among developers in the region who are seeking favorable legislation during a period of rapid growth.

West Tennessee construction companies and real estate firms have spent big on a new political action committee formed in 2022 to influence legislative policy. The little-known Build Tennessee PAC spent $186,000 in the six months before the start of this year’s legislative session, the fourth largest spender over that period, according to campaign finance records analyzed by the Lookout.

Keith Grant, a  prominent Collierville developer listed as Build Tennessee’s contact, did not respond to a request for comment.

Read more: Connecting the dots between Tenn. home builders and bill to deregulate construction on wetlands 

The measure also has gained the backing of influential statewide groups, including the Tennessee Farm Bureau, the Home Builders Association of Tennessee, Associated Builders and Contractors and the Tennessee Chamber of Commerce.

Bradley Jackson, president and CEO of the Tennessee Chamber of Commerce, said last week the legislation – which Vaughan recently amended to make distinctions between different types of wetlands – represents a fair and balanced approach.

Jackson said the chamber convened a working group of five trade organizations last summer that concluded Tennessee’s wetland regulations need adjustment.

“We feel this deal strikes a really good middle group. It provides the business community with consistency and certainty. We can ensure we’re being compliant,” Jackson said.

Vaughan offers ‘compromise’ amendment; environmental groups say it leaves wetlands unprotected

The legislation is scheduled to be heard Wednesday in the Agriculture and Natural Resources Committee, with an amendendment that makes distinctions between wetlands.

The amendment would allow developers to build on “low-quality” wetlands and up to 4 acres of “moderate” isolated wetlands without seeking state permission.

Environmental groups say the proposal continues to place large pieces of Tennessee wetlands at risk.

Rep. Kevin Vaughan, R-Collierville. (Photo: John Partipilo)
Rep. Kevin Vaughan, R-Collierville. (Photo: John Partipilo)

“Vaughan’s current amendment is not a compromise as it requires no mitigation for low-quality wetlands regardless of size and no mitigation for large swaths of moderate-quality wetlands,” Grace Stranch, chief executive officer of the Harpeth Conservancy said. “The development resulting from those huge carveouts will likely cause increased flooding, a decline in water quality, higher water bills, and aquifer recharge problems.”

The measure has also drawn pushback from the Tennessee Department of Environment and Conservation and the Tennessee Emergency Management Agency.

“We at TDEC fear the proposal could result in greater back-end costs,” Gregory Young, the agency’s deputy commissioner, told lawmakers earlier this month.

Alex Pellom, chief of staff for the Tennessee Emergency Management Agency, cautioned the bill could lead to more flooding; the state has already suffered its wettest years in history since 2019, leading to devastating floods, billions of dollars in property damage and loss of life.

“We continue to work with the sponsor to discuss potential solutions,” Eric Ward, a TDEC spokesperson, said last week.

A Supreme Court decision limits federal oversight

Vaughan’s bill was introduced on the heels of a controversial U.S. Supreme Court decision last year that narrowed federal protections of wetlands, leaving it up to states to set their own rules.

The court concluded that only wetlands that have a surface water connection to rivers, lakes and oceans fall under federal oversight and are subject to Clean Water Act regulations.

There is little debate in the stormwater community about the value of wetlands as key instruments of maintaining water quality and mitigating damaging flooding.

– Aaron Rogge, Tennessee Storm Water Association

The majority of Tennessee’s wetlands — 432,850 out of  the state’s 787,000 acres of wetlands in the state — do not have a surface connection to a water source, according to TDEC. It is these wetlands Vaughan is seeking to remove from state oversight and protection.

“This is going to be a major change to the way that the state manages its water resources, and likely one that we’ll look back on as a product of our current political climate,” said Aaron Rogge, a Nashville-based civil engineer who is also the current president of the Tennessee Stormwater Association.

“There is little debate in the stormwater community about the value of wetlands as key instruments of maintaining water quality and mitigating damaging flooding; in fact, many cities and counties choose to actively construct wetlands to manage their runoff,” he said.

Tennessee is not alone in targeting wetland regulation after the high court’s decision, according to Jim Murphy, director of legal advocacy for the National Wildlife Federation.

Legislatures in Illinois, New Mexico, Arizona and Colorado are considering expanding wetland protections in light of the court’s decision while Indiana is among states considering a developer-backed bill similar to Vaughan’s.

“It’s a very fluid situation,” Murphy said. “In a lot of ways, it mirrors the politics of a state. But as you get down to state-level realities of what’s being lost, people are seeing what unregulated development means and often that means that their special places get paved over.”

Reporter Adam Friedman contributed to this story.