Project Background

In December 2007, in collaboration with efforts by The Conservation Fund (TCF) and the State of Delaware to conserve the last-remaining, large blocks of forestland in Delaware, EIP acquired 1,206 acres within the Cypress Forest Swamp Legacy Area in Sussex County, Delaware.

The property was selected by EIP because of:

• Its conservation significance as one of the largest blocks of intact open space in the state's Cypress Swamp Forest Legacy Area
• The potential for significant restoration of the rich biodiversity and the wetland ecosystems that once existed on the property

Known as the "Daisey" and "James" Tracts, these highly developable properties were sold as part of a larger disposition by one of the few remaining industrial forest landowners in Delaware; a national trend promulgated by a realization that rural land values have shifted from timber production to development. Due to a shortfall of available public and philanthropic conservation funding (which have been the sources of the State’s past forestland conservation efforts), EIP was asked to participate in the conservation effort. If not acquired for conservation, the properties would most likely have been converted to their highest-and-best use: residential subdivisions.

A ditched and drained forest. 

Over the past two centuries, most of southern Delaware's forests have been significantly altered from their original, natural state of deciduous hardwoods, either cleared for intensive agriculture in the 19th century, or converted to monoculture pine plantations in the 20th century. The result of these actions has been the loss of over 50% of Delaware’s pre-settlement wetlands, now represented by just a handful of remnants like the 15,000 acre Cypress Swamp Preserve just to the east of EIP’s property.

Using private investment capital, and market-based conservation and restoration mechanisms, EIP is collaborating with conservationists in Delaware who are working to reverse these historic impacts and bring back the rich biodiversity and ecological benefits once found on properties like the Daisy and James Tracts. Working with the US Fish & Wildlife Service, EPA, the State of Delaware, and the US Army Corps of Engineers, EIP is utilizing the strong demand for ecosystem service credits found in southern Delaware (needed to offset unavoidable impacts to wetlands and streams) to pay for the conservation and restoration of the Daisey and James Tracts, as well as generate an attractive return for EIP’s investors.

Once all of the wetland mitigation credits have been sold, the properties will be sold, either to the state as a Park or Wildlife Management Area, or to a private conservation buyer subject to permanent conservation easements. Revenues generated by the sale of mitigation credits will also allow EIP to establish a long-term monitoring and maintenance fund for the property to insure the quality and viability of its restored ecosystems in perpetuity.

Project Location

View Nanticoke and Indian River Wetland Mitigation Bank in a larger map

Primary Components of Value

Wetland Mitigation Banking
EIP will establish the first private wetland mitigation bank in Delaware through the restoration and protection of approximately 420 acres of the property’s former wetlands. Demand for mitigation is driven in part by the expansion of a nearby landfill and the mitigation needs of a regional airport. Additional demand will be driven by infrastructure, commercial and residential development.

Conservation Finance
The properties are within the acquisition boundary of the Cypress Swamp Forest Legacy Area, making them eligible for federal Forest Legacy conservation easement funding. In late 2009, the state designated the Daisy Tract as the #1 priority for federal conservation funding.  On February 4, 2010, the project was included in President Obama's FY 2011 Forest Legacy Program Budget.

Secondary Components of Value

Timber Management
The property lies in the Delmarva Peninsula's most productive pine growing region. It has traditionally been managed for loblolly pine pulpwood, a low-margin management practice that would not be economical unless vertically integrated with a mill.  On the portions of the property not included in the mitigation bank, EiP will shift timber management practices to a longer-term rotation, which will significantly increase the value per acre over the life of EIP's investment, while establishing a more ecologically diverse and resilient forest community. 

Logging to remove plantation pine and make way for native hardwood trees (summer, 2010). 

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