The robust market in South Florida for waterfront real estate development is creating new permitting challenges that may result in delays and increased costs to projects. This development and regulatory trend may extend to other coastal areas in Florida. Florida Department of Environmental Protection ("FDEP") regulations require that coastal development activities not result in a net loss of beach sand from the coastal system, and that excavated sand must be of a certain quality to be re-used. Because foundations and underground parking garages are now being developed at greater depths to accommodate taller structures and required parking, more sand must be excavated than ever before. This is increasingly leading to permitting delays and increased costs for many projects.
The Florida Legislature has determined that Florida's coastal systems, including its beaches and dunes, are one of the most valuable resources in Florida, since they provide storm protection to upland properties, recreational space, and wildlife habitat. Generally, FDEP manages coastal systems by setting a Coastal Construction Control Line ("CCCL") on a county-by-county basis. Nearly all development and excavation activities seaward of the CCCL must be permitted by FDEP, which has broad discretion in regulating where and when development and excavation activities may take place, and where the excavated sand may be placed afterwards.
Developers and FDEP are now faced with the task of adapting a historical permitting process to a rapidly developing market that is demanding larger beachfront structures. In the past, many projects could accommodate excavated sand onsite. When they could not, offsite placement on dry, sandy beaches was relatively easy. Oftentimes now, though, sites are too constrained, and offsite placement is becoming more challenging for two reasons.
First, projects in some areas are not located near dry beaches that need sand. Traditionally, FDEP has only allowed excavated sand to be placed on the dry sandy beach nearby the development. Recently, we developed a new approach with FDEP on several projects to allow sand excavated from constrained development sites to be placed in eroded "hotspot" areas located within the wet sandy beach, below the mean high water line. Each project site must be evaluated independently to assess whether this approach will work from a timing and cost feasibility standpoint, keeping in mind the applicable regulations and permit conditions that will be applied to provide FDEP the assurances needed regarding the quality of sand. Since sand sources in Florida for local governments to maintain beaches are limited and costly, this approach should be viewed as a positive alternative for addressing targeted eroded beaches.
The second reason offsite placement is becoming more challenging is due to some local governments regulating and controlling the quality and placement of sand despite FDEP's role and authority, and imposing more stringent requirements on this activity. We are seeing a variety of approaches by local governments, including:
- Regulating when and how sand may be removed from or placed on coastal properties, using conditions that are stricter than FDEP's regulations;
- Providing for fines, penalties, or refusal to issue building permits if their sand management regulations are not met;
- Conditioning development approvals on sand quality, placement, and other actions;
- Requiring large bonds to be posted and/or agreements in order to assure future remediation of sand in the event the local government determines the sand quality does not meet their standards; and
- Seeking to have FDEP adopt more stringent testing requirements for excavated sand as a part of FDEP's ongoing CCCL program.
These local government actions will result in increased project costs, risks, and development delays impacting all aspects of a project from the regulatory permitting and compliance to construction management.