EPA stands firm on resort

Garth Stapley, Modesto Bee, California, 11 September 2000

Federal agencies bickering over proposed construction of the Diablo Grande resort soon may move their battleground to Washington, D.C.

At issue are permits developers need to resume construction on the sprawling resort in the Diablo Range west of Patterson. The U.S. Environmental Protection Agency says developers don't deserve the permits until they come up with better plans on replacing wetlands that would be destroyed and can guarantee water runoff is clean enough.

"It's exasperating that it's fallen to us to try to minimize the impacts of the project," said Tim Vendlinski, chief of the EPA's wetlands regulatory office in San Francisco.

Developers and their supporters, including Stanislaus County officials, are anxious to build a luxury hotel, a showcase winery, 313 homes, a tennis club, spa, shops and restaurants on 2,300 of the resort's nearly 30,000 acres. The resort already features two golf courses, a clubhouse, a small winery and vineyards.

Owners hope the resort eventually will grow by four more golf courses, a wilderness center, research campus, offices and thousands of upscale homes in five villages.

For two years, the EPA has been warning the State Water Resources Control Board and the U.S. Army Corps of Engineers against issuing water quality certification and a wetlands-loss permit, respectively.

The state agency's executive director six weeks ago certified Diablo Grande's water quality plan, over the EPA's objection. That cleared the way for the Army Corps to issue a wetlands permit, a process that's pending.

If the Army Corps doesn't heed the EPA's warning, EPA officials say they might "elevate" the debate to the nation's capital. Ultimately, the EPA could seize the reins and veto permits -- blocking Diablo Grande from resuming construction.

"We're taking this extremely seriously," said Vendlinski, whose office has served notice to the Army Corps not to ignore the EPA's warning.

Elevating a dispute is a little-used strategy in this region, Vendlinski said. The developers' attorney questioned whether it's rare.

Army Corps officials downplay the disagreement. They note that while EPA is worried about all aspects of protecting the environment, the Army Corps' charge is to simply regulate the filling in of wetlands.

"We've got a much smaller mission," said Jason Fanselau of the Army Corps.

Developers wait on sidelines

Forced to wait out the skirmish are Diablo Grande developers. They recently climbed over their largest hurdle to date -- securing a water source large enough for the first phase of construction -- only to run into cross-fire from different arms of government.

Russ Newman, a Modesto attorney representing Diablo Grande, said his clients have offered to turn 15 acres into wetlands to make up for destroying three acres of wetlands, needed mostly for roads.

"We've had to fight every step of the way," Newman said, "so to some degree this is par for the course. But surely (EPA officials) have better things to do than worry about three acres of basically farm ditches."

At one point, EPA officials "wanted several-thousand acres to compensate for these ditches," Newman said. "We weren't about to stand for that."

It's not that simple, EPA officials contend.

In various documents, the EPA has predicted that Diablo Grande construction would:

* Replace 13 miles of Salado Creek with drainage pipes.

* Affect 7.5 acres of wetlands, including destruction of 5.7 acres.

* Degrade creek water with polluted drainage.

* Fragment thousands of acres of wildlife habitat.

Letting developers proceed might "damage aquatic resources of national importance," Vendlinski said, adding that "7.5 acres doesn't sound like a lot, but in a relatively arid area, that's a fairly sizable amount."

Developers already face lawsuits brought by a downstream ranch whose owners say Diablo Grande construction caused parts of the ranch to flood last year, and by an organization whose officers say the resort threatens fish habitat.

The California Sportfishing Protection Alliance, which filed the latter lawsuit, warned the Army Corps in an Aug. 9 letter that the group would file another lawsuit challenging a wetlands permit, should the corps issue one.

The same day, the sportfishing alliance sent a letter to EPA officials, requesting that they take on the corps in Washington, D.C.

"In my 20 years of environmental law, I've never seen such polarity between what the EPA is saying and what the state (water) board is planning to do," said Alan Beaven, the sportfishing alliance's San Francisco attorney. "(State officials) are just saying, 'We don't care how good your reasoning is, we're not going to follow what you say.' "

Diablo Grande developers will follow the debate regardless of where it ends up, Newman said.

"The fact is, (EPA officials) are not the judge and they are not the jury; they're a participant in the process," Newman said. "And we have a right to defend ourselves vigorously. ... If they're determined to elevate ditch-taking (to Washington, D.C.), that's their choice."