STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

VQH DEVELOPMENT, INC., )

)

Petitioner, )

)

vs. ) CASE No. 92-7456

)

STATE OF FLORIDA DEPARTMENT ) OF ENVIRONMENTAL REGULATION, )

)

Respondent, )

and )

)

MANASOTA-88, INC., )

)

Intervenor. )

)

RECOMMENDED ORDER

Pursuant to notice the Division of Administrative Hearings by its duly designated Hearing Officer, K. N. Ayers, held a formal hearing in the above- styled case on February 24 and 25, 1993 at Tampa, Florida.

APPEARANCES

For Petitioner: John W. Wilcox, Esquire

Post Office Box 3273 Tampa, Florida 33601-3273

E. Gary Early, Esquire Post Office Box 10555

Tallahassee, Florida 32302-2555

Buddy Blair, Esquire

202 Madison Street Tampa, Florida 33602

For Respondent: W. Douglas Beason, Esquire

Assistant General Counsel

Department of Environmental Regulation 2600 Blairstone Road

Tallahassee, Florida 32399-2400

For Intervenor: Thomas W. Reese, Esquire

123 Eighth Street North

St. Petersburg, Florida 33701

STATEMENT OF THE ISSUES

1. Whether Petitioner has provided reasonable assurance that the proposed project is not contrary to the public interest as set forth in Section 403.918(2)(a), Florida Statutes and Rule 17-312.300 et. seq., Florida Administrative Code.

   
   

2. Whether Petitioner has reduced the environmental impacts of the project in conformance with Section 403.918, Florida Statutes and Chapter 17-312.200, Florida Administrative Code.

   
   

3. Whether the Respondent considered the cumulative impacts of the project pursuant to Section 403.919, Florida Statutes.

PRELIMINARY STATEMENT

By notice of Intent to Issue dated November 17, 1992 the Department of Environmental Regulation (DER) gave notice of its intent to issue a dredge and fill permit to allow Petitioner, VQH Development, Inc. (VQH), to fill for commercial purposes some 11 acres of a mature high quality red maple swamp on a 94-acre tract of land owned by Petitioner located immediately east of Highway

1. 19 in Countryside, Pasco County, Florida. The proposed permit is conditioned on Petitioner providing a mitigation area of approximately 30 acres of hardwood forested wetlands on the 94-acre tract plus other parcels owned by Pinellas County and an easement held by Florida Power Company along the northern and eastern portions of the 94-acre tract. In addition to creating some 34.6 acres of additional wetlands Petitioner will place a 34.6 acre mitigation area and 60.78 acres of existing forested wetlands and uplands on the tract in a conservation easement.

   
   

   At the hearing, the parties submitted a joint prehearing stipulation which facts are included below. Thereafter, Petitioner called seven witnesses (one by deposition), Respondent called no additional witnesses, Intervenor called five witnesses and 24 exhibits were admitted into evidence. All witnesses testified as experts and submitted prefiled testimony except for one fact witness and the witness who testified by deposition.

   
   

   Proposed findings submitted by the parties are accepted except as noted in the Appendix attached hereto. Those proposed findings neither included below nor excepted in the appendix were deemed unnecessary to the conclusions reached. Rulings on motions to strike and objections to parts of prefiled testimony was reserved at the hearing. Those motions to strike and objections to answers on prefiled testimony are overruled. I have made no findings on uncorroborated hearsay testimony nor have I given credence to opinions of non-expert witnesses which opinions would have required special knowledge or expertise.

   
   

   Hereafter, all references to sections refer to the Florida Statutes and all citations to rules refer to the Florida Administrative Code.

   
   

   Having fully considered all evidence presented I submit the following:

   FINDINGS OF FACT

   
   

   1. The Department of Environmental Regulation is the administrative agency of the State of Florida with the authority to administer the provisions of Chapter 403, Florida Statutes and the rules pertaining thereto with regard to matters involving water quality and the dredging and filling of wetlands, as defined therein.

      
      

   2. The Intervenor, Manasota-88, is a public interest environmental protection and conservation organization incorporated under the laws of the State of Florida as a not-for-profit corporation. Manasota-88 is a citizen of the State of Florida for purposes of Section 403.412(5), Florida Statutes and thereby has standing as a party in these proceedings.

      
      

   3. Petitioner, VQH, is the permit applicant and is a wholly owned subsidiary of Republic Bank of Clearwater, Florida who acquired the tract in foreclosure proceedings.

      
      

   4. Respondent, DER, is the affected state permitting agency.

      
      

   5. On November 18, 1989, VQH applied for a permit to dredge and fill wetlands on a site in southern Pasco County for purposes of commercial development. The site is comprised of both uplands and wetlands and is located on the east side of U.S. Highway 19 in Holiday, approximately one mile north of the Pasco County border with Pinellas County.

      
      

   6. After the Department denied the initial application VQH modified the application to reduce the to be destroyed wetlands from 14 acres to 11 acres and on November 17, 1992 the Department executed an Intent to Issue the subject permit to VQH.

      
      

   7. On December 4, 1992 Manasota-88 timely filed its petition to intervene in opposition to the grant of the permit and these proceedings followed.

      
      

   8. In addition to the above the parties stipulated the following are not issues in these proceedings.

      
      

      1. Water quality standards;

      2. Outstanding Florida Waters;

      3. Threatened or endangered species;

      4. Navigation, flow of water, erosion or shoaling, and

      5. Significant historical and archaeological resources.

   9. As stated in the notice of Intent to Issue (Exhibit 12)

      
      

      The project site consists of 94 ac. of forested uplands and wetlands.

      The wetlands on site are located along a drainage divide; they drain to both the Anclote River on the east and the Gulf of Mexico on the west through a series of ditches, roadway culverts, canals, and natural wetlands. The 52.52 ac. of wetlands on site are mature, red maple dominated swamps typical of the Anclote River flood plain. This site previously included cypress as one of the dominant canopy species, as noted by the number of remaining stumps, but appears to have been logged within the last 40 years. The canopy is currently dominated by red maple; also present are sweetbay, water oak, swamp laurel oak, water tupelo and cabbage palms.

   10. Due to the substantial conflict in the evidence in this regard the evidence was insufficient to establish the erstwhile dominance of cypress in this area.

       
       

   11. The development proposed is in the southwest corner of the 94-acre tract just east of U.S. 19. Near the center of the proposed development a bell- shaped upland area extends north from the southern boundary of the property. Petitioner proposed to fill to the east and west of the bell-shaped uplands some

       8.9 acres. The other 2.1 acres included in this requested permit are for a road along the southern edge of the property which will be an extension of Society Drive and provide a needed east-west corridor in this part of Pasco County.

       
       

   12. The principal concern of those opposed to the granting of this permit is the filling of the wetlands between the bell-shaped area westward to U.S. 19.

       
       

   13. This area consists of hummocks originating from fallen trees or logs on which the hardwood trees are located. Between these hummocks are deep pockets which contain water for extended periods. As stated by one witness whose testimony was generally corroborated by other witnesses.

       
       

       The VQH wetland represents a complex ecosystem. Due to the relief, complex flow patterns, muck depths and overall age of the system there is a high diversity of habitat for aquatic fauna and wetland dependent animals. The deepest and most complex section of the system on the site is the area proposed for permanent destruction. The diversity of aquatic fauna of the area to be filled is a function of the permanency of the pools dotting the landscape. The longer the site is wet through an annual cycle the more likely aquatic fauna with long life cycles will flourish. As an example, a number of aquatic insects require 5 or more months to hatch out, mature and emerge as adults to complete the life cycle. The longer water remains on the site the greater the number of species adaptable to the conditions will flourish. The importance of this is to develop high diversity and a well balanced population of not only the invertebrates but also the fishes and other animals dependent on these invertebrate life forms for food. (Exhibit 17, p.6)

       
       

   14. The project application is one of the most controversial ever received by the DER Southwest District Office, not only because of the proposed destruction of a valuable wetland area but also because of the high visibility of this project as one of the few undeveloped areas along the U.S. 19 corridor. A genuine concern expressed by several opponents of this application is that if this permit is granted, numerous other property owners of wetland properties along other major highways will also be requesting permits to fill and develop their properties. This is a valid concern; however, if the proposed mitigation is found to be adequate and replaces three acres of wetlands to every one destroyed, the state will gain wetlands and not suffer a permanent loss of wetlands. Other applicants could also be required to provide adequate mitigation to compensate for the proposed loss of their wetlands.

       
       

   15. Proposed findings submitted by DER and Manasota-88 extoll the virtues and benefits accruing to the state from the wetland area proposed for filling. It is accepted as fact that the proposed destruction is of a high quality hardwood wetlands and, absent adequate mitigation, is contrary to the public interest. Although there is testimony from Petitioner's witness that the standing water and long hydroperiods in this hardwood wetlands decreased the undergrowth that would otherwise be expected, this evidence does not materially detract from the ecological value of these wetlands.

   16. The testimony of Petitioner's witnesses that reducing the foot print of the proposed development from 13+ acres to 8.9 acres constitutes the minimum area for the proposed shopping center to be economically viable was not rebutted, although several DER employees opined that the project had not been adequately minimized.

       
       

   17. This leaves the principal issue to be decided is whether the proposed mitigation, if carried out as required by the draft permit approval, has a substantial probability of success.

       
       

   18. Intervenor's witnesses, except for Ann Redmond, DER's mitigation coordinator, are all employed in the DER Southwest District Office and all oppose granting the permit here involved primarily because of the historical lack of success of projects to develop fresh water hardwood wetlands.

       
       

   19. The proposed permit to be granted also involves the removal of an abandoned waste water treatment plant owned by Pasco County which is a potential source of pollution, modification of existing ditches which serve to channel water coming onto the property, placing culverts under the FPC road and right- of-way berm, and placing some 95 acres in a conservation easement. As provided in the notice of Intent to Issue (Exhibit 12), the mitigation for the loss of 11 acres of mature forested wetland shall include the following implementation plan:

       
       

       1. create and restore 18.6 ac. forested wetland from existing uplands;

       2. remove an abandoned wastewater treatment

          plant and create 8.8 ac. of forested wetlands;

       3. convert an existing 2 ac. ditch contiguous to the wastewater treatment plant to a forested wetland system;

       4. convert 2.95 ac. of existing ditch within a Florida Power Corp. (FPC) easement to an herbacious wetland system;

       5. restore 0.75 ac. of disturbed herbacious wetlands within the FPC easement by regrading and planting with shrubby species;

       6. create 1.49 ac. shrubby wetlands from uplands within the FPC easement.

       7. install two culverts within the FPC easement roadway;

       8. restore 1.55 ac. of upland by planting with mesic and traditional hardwood species; and

       9. place all created, restored and converted wetlands (34.60 ac.) and the remaining existing wetlands and uplands on site, 60.78 ac. including

15.42 ac. within the FPC easement, in a perpetual conservation easement.

1. The impact area has a tree density of approximately 1000 trees per acre. Red maple was found at a density of approximately 157 per acre and black haw was found at approximately 230 shrubs per acre.

   
   

2. To recreate this density Petitioner proposes planting one gallon size trees on 6 foot centers over 50 percent of the site. However, it is proposed to create a more natural effect by clumping some trees together in some areas and

   space them further apart in other areas. These one gallon trees will be 30 percent pond cypress, 30 percent pop ash, 30 percent black gum and a 10 percent a mix of swamp bay, red maple and laurel oak. More of the mature trees will be removed from the impact site by spading (remove tree and root system with a machine designed to do this) and transplanting to the mitigation areas.

   
   

3. The conditions included in the DRAFT permit with the notice of Intent to Issue contain detailed clearing and planting requirements which, in some respects, differ from the Petitioner's testimony presented at this hearing. As an example, under paragraph 7 the following is required:

   
   

   The wetland creation restoration, conversion, upland restoration, and upland and wetland preservation, shall be conducted prior to or concurrent with the wetland impacts, and shall be completed to the point of planting of tree species no later than one year after the commencement of the wetland impacts.

   
   

   Under paragraph 9 the following requirement appears:

   
   

   1. A minimum of one foot of fresh organic soils or muck, stock piled for not longer than 7 days, obtained from the wetland impact site, shall be uniformly spread over the entirety of the wetland creation and conversion areas prior to the final grading.

      
      

   2. Within thirty days of the completion of grading, the wetland creation and conversion areas shall be surveyed. A topographical map, showing a minimum of one foot contour intervals based on a 50 foot grid, certified by a registered land surveyor or professional engineer, shall be submitted to the Bureau of Wetland Resource Management in Tallahassee and to the Southwest District Office in Tampa within 60 days of the completion of the final grading.

   
   

4. In this connection it is essential that the tree spading be accomplished during the trees' dormant period from November to March.

   Petitioner was anxious to have an expedited hearing so the tree spading could be completed by early march. It is presumed that all of the transplanting and spading is intended to be done between November 1993 and March 1994 if this permit is granted. Petitioner's witnesses indicated that if the transplanting (by spading) is not done in the plant's dormant period their survival rate will be low and nursery grown plants would be used in lieu of spading. The draft period requires 7 gallon trees to be used to substitute for trees not spaded.

   
   

5. Petitioner proposes, and the DRAFT permit requires, the Petitioner to grade the existing uplands intended for conversion to wetlands to provide gradients low enough to qualify as wetlands and be inundated at various times of the year. Petitioner proposes to establish a wetland area where the water will move across the property in a sheet flow eastward towards the Anclote River basin. The spread of organic material over the planting sites will improve the probability of success of the mitigation project by reason of the seeds in the soil plus the benefit of the muck to the propagation and growth of the planted trees and scrubs.

   
   

6. The water level in the newly created wetlands will be monitored by gauges established at the easterly part of the property and the hydroperiod for the area established and maintained.

   
   

7. Further, in the first two years of the planting, Petitioner will provide for temporary irrigation of the newly planted area if necessary. Also

   Petitioner will maintain 85% survival for the trees planted in the first two years by planting additional trees as needed.

   
   

8. Petitioner also proposed and the DRAFT permit requires the removal of some of the hummocks from the impact area to the newly created wetlands..

   
   

9. In 1990 the Florida Legislature instructed DER to assess the use and effectiveness of mitigation in Wetland Resource Regulation permitting. The study was intended to evaluate wetland mitigation projects required by DER permits in terms of compliance with both: 1) the permit conditions, and 2) whether the created wetlands were biologically functional, i.e., animal species diversity and density, plant reproduction, water quality, hydroperiod, etc.

   
   

10. That study resulted in a Report on the Effectiveness of Permitted Mitigation dated March 5, 1991. (Attachment B to Exhibit 16) This study found a high rate of noncompliance with mitigation requirements in permits issued.

    The ecological success rate of mitigation design for freshwater permits was only

    12 percent. However, it was predicated that with remedial action this rate could rise to 41%. The study made recommendations for improvements in DER policy and rules involving mitigation projects which included the consideration of mitigation options in the following sequence:

    
    

    1. enhancement of degraded wetlands, or restoration of historic wetlands;

    2. preservation of other wetlands in conjunction with other forms of mitigation; and

    3. wetland creation.

    
    

11. This committee further recommended that

    
    

    Creation should only be accepted if review of the creation proposals indicates that it includes features to ensure that it will be successful. In all cases, if the proposed mitigation does not provide reasonable assurance that the wetland losses can be offset, the project should be denied. (Exhibit B of Exhibit 16)

    
    

12. Without changing rule provisions DER began to orient its view of the minimization process that is required by Rule 17-312.060(10) by stressing that step in the process. They also re-assessed the use of wetland creation from uplands as a common mitigation option, describing it as the least preferable mitigation option, especially for freshwater wetlands.

    
    

13. Additional studies conducted on behalf of the South Florida Water Management District and the St. Johns River Water Management District found lack of compliance with mitigation requirements, and lower success rates for fresh water mitigation than salt water mitigation.

    
    

14. The March 5, 1991 Report found the following four factors to be critical in assuring a high likelihood of success:

    
    

    1. Constructing the wetland floor at the proper elevation relative to the groundwater table.

    2. There must be a hydrologic connection between the mitigation wetland and other waters of the State to ensure the wetland is within Department wetland resource regulation jurisdiction and functions as a water of the state.

    3. The topography and configuration of the wetland should coincide with the permit requirements to yield the required wetland acreage.

    4. Regular maintenance of the wetland to reduce exotic and nuisance plants during its establishment.

       
       

15. The mitigation proposal submitted by Petitioner addresses each of the above four factors. Additionally, Petitioner is required to post a bond before commencing the project of $440,000 (110% of the estimated cost of the mitigation) to ensure sufficient funds are available to complete the mitigation project.

    
    

16. Generally speaking a mature wetland is developed only over an extended period of many years. On the other hand the attempt to develop wetlands from uplands to provide mitigation for the destruction of other wetlands is quite new, leading opponents to conclude this to be more art than science. Serious studies and experiments with developing wetlands have occurred only in the past 10-15 years. These studies have not only indicated that wetlands can be created, but also have shown that developing freshwater wetlands is a very difficult task requiring dedication and close attention to the project. During the past decade a lot of misconceptions have been corrected but the process has not as yet reached the stage for the success of a project to generate freshwater hardwood wetlands can be guaranteed. A similar lack of progress has been made in creating freshwater undergrowth (shrubs).

    
    

17. While the intent to deny this application in 1989 was signed by Carol Browner, DER Director, and the intent to grant was signed by Janet Llewellen, Bureau Chief for the Bureau of Wetland Resource Management, the ultimate decision in both instances was made by Browner, who, in deciding to grant the instant application, overruled the recommendation of a majority of the DER staff involved with this project. This accounts for the conditional "if successful" acceptance of the mitigation plan by those DER staff members who testified in support of the application.

    
    

    CONCLUSIONS OF LAW

    
    

18. The Division of Administrative Hearings has jurisdiction over the parties to, and the subject matter of, these proceedings. Section 120.57(1), Florida Statutes. The controlling statute in dredge and fill applications involving impacts to wetlands is Chapter 403.91, et. seq., Florida Statutes.

    
    

19. Pursuant to Section 403.913 the area here in issue is subject to DER permitting requirements.

    
    

20. Section 403.918(2) provides in pertinent part:

A permit may not be issued under section 403.91-403.929 unless the applicant provides the department with reasonable assurance that the project is not contrary to the public interest.

* * *

1. In determining whether a project is not contrary to the public interest

   . . . the department shall consider and balance the following criteria:

   
   

   1. Whether the project will adversely affect the public health, safety or welfare or the property of others;

   2. Whether the project will adversely

      affect the conservation of fish and wildlife, including endangered or threatened species, or their habitat;

   3. Whether the project will adversely affect navigation or the flow of water or cause harmful erosion or shoaling;

   4. Whether the project will adversely affect the fishing or recreational values or marine productivity in the vicinity of the project;

   5. Whether the project will be of a temporary or permanent nature;

   6. Whether the project will adversely affect or will enhance significant historical and archaeological resources under the provisions of S.267.061; and

   7. The current condition and relative value of functions being performed by areas affected by the proposed activity.

1. In an effort to reduce the impact of the proposed development DER requires the applicant to reduce the footprint of the project on the wetlands to the extent practicable. Rule 17-312.060(10), provides that

   
   

   During the processing of the permit application, the department shall determine whether or not the application, as submitted, meets the criteria contained in Sections 403.918(1)&(2) and (a)1.-7 and 403.919, F.S. If the project, as designed, fails to meet the permitting criteria, the department shall discuss with the applicant any modifications to the project that may bring the project into compliance with the permitting criteria. The applicant shall respond to the department in writing as to whether or not the identified modification to the project is practicable and whether the applicant will make the identified modification. The term "modification" shall not be construed as including the alternative of not implementing the project in some form. When the Department determines that the project as submitted or modified fails to meet the criteria contained in Sections 403.918(1)&(2)(a)1.-7 and 403.919, F.S., the applicant may propose mitigation measures to the Department as provided in Chapter 17-312, Part III, F.A.C. Nothing herein shall imply that the department may not deny an application for a permit, as submitted or modified, if it fails to meet the criteria in Sections 403.918(2)(a), F.S., or that mitigation must be accepted by the Department.

   
   

2. Rule 17-312.300(3), provides that

   
   

   the Department will, in each case, first explore project modifications that would reduce or eliminate the adverse environmental impacts of the project, and will suggest any such modifications to the applicant either in addition to or in lieu of mitigation, as provided in Rule 17-312.060(10), F.A.C. The applicant shall consider modifications to the project proposed by the Department whether or not a mitigation proposal has been submitted. Should such mutual consideration of modification and mitigation not result in a permittable project the Department must deny the permit.

   
   

3. By reducing the footprint of the shopping center from 13 acres to 8.9 acres Petitioner has minimized the impact of the project to the extent practicable and still have an economically viable development.

4. The parties stipulated that water quality standards; Outstanding Florida Waters; navigation, flow of water erosion or shoaling; threatened or endangered species; and significant historical or archaeological resources are not at issue here.

   
   

5. Some evidence was presented that the public health, safety and welfare and fish and wildlife as well as fishing and recreational values will be affected to a minor extent by this project. However, the project will be permanent and result in the destruction of 11 acres of a highly effective and valuable wetland. Accordingly, the adverse effects of the project makes the project contrary to the public interest.

   
   

6. However, Section 403.918(2)(b), provides in pertinent part:

   
   

   If the applicant is unable to otherwise

   meet the criteria set forth in this subsection, the department, in deciding to grant or deny

   a permit, shall consider measures proposed by or acceptable to the applicant to mitigate adverse effects which may be caused by the project.

   
   

7. The latter part of the above section, which is not quoted, provides for the department to conduct a study of mitigation results and to report to the Legislature the results. This is the study and report referred to in Findings 28-30 above.

   
   

8. That study produced the recommendations noted in Finding 33 above, that the upland proposed for conversion to wetland be graded to the proper elevation relative to the groundwater table, that there be a hydrologic connection between the mitigated wetland and other waters of the state, that the topography and configuration of the created wetland coincide with the permit requirements and that the project be carefully monitored to control the intrusion of exotic and nusiance plants. The DRAFT permit here proposed for issue requires the above criteria be met.

   
   

9. Rule 17-312.350, provides in pertinent part:

   
   

   1. Success criteria. Due to the wide range of types of projects which may be used to create or enhance existing waters, specific success criteria will be determined on a case-by-case basis. A determination that the mitigation area will be compared to a

      reference water will be specified by conditions in the permit when there is insufficient information available to judge the successful creation or enhancement of the type of wetland involved. In comparing the mitigation area to a reference water, it is not the intent of the department to require that the mitigation area exactly duplicate or replicate the reference water. The reference water is to be used as a guide to the department to assure that the mitigation area will be sufficiently similar

      to the reference water to meet the permitting criteria. Success must be measured in terms

      of whether the objectives of the mitigation can be realized. The success criteria to be included in the permit conditions must clearly address the minimum requirements necessary to

      obtain a determination of success (e.g., percent covered by wetland vegetation, vegetation is reproducing naturally, target water quality standards are met, etc.). The mitigation will be deemed successful if:

      1. All water quality standards are met.

      2. The mitigation project has a hydrologic regime sufficient to sustain it in a viable condition; and

      3. The specific success criteria contained in the permit are met.

         
         

10. The recommendation noted in Finding 30 that creation of new wetlands (from uplands) should only be accepted if the proposal includes features to ensure that it will be successful, is unreasonable and contrary to the rule above quoted. All witnesses recognized that conversion of uplands to wetlands is not an exact science but includes art and frequently a little help from the weather. An extended dry period would doubtless wreak havoc on the best designed program of this sort.

    
    

11. The controlling issue in these proceedings is whether the proposed mitigation provides reasonable assurances that the destruction of 11 acres of freshwater hardwood wetlands would not be contrary to the public interest. It is easy to agree that, if successful, production of 3 acres of hardwood wetlands for each acre destroyed would not be contrary to the public interest and could perhaps meet the higher criteria of being in the public interest. Therefore, the question remains does the mitigation plan set out in the DRAFT permit proposed for issuance, provide reasonable assurances of success.

    
    

12. The parties cite Metropolitan Dade County v. Coscan Florida, Inc. and DER, 609 So.2d 644 (Fla. 3 DCA 1991) for legal principles applicable here. Coscan involved one significant difference, to wit: Water quality, the primary concern in Coscan, is not an issue in these proceedings. In Coscan the court held that evidence that the project would not be contrary to the public interest, i.e., that water quality would not be degraded, must be presented before the application can be approved; and that monitoring the quality during construction of the marina does not meet the required standard of reasonable assurances that water quality will not be degraded. As defined by the court in Coscan ""reasonable assurances" contemplates, in our view, a substantial likelihood that the project will be successfully implemented."

    
    

13. Accepting this definition as the controlling law on what "reasonable assurances that the project will not be contrary to the public interest" means, we are still faced with an abysmal, but improving, track record on successful construction of freshwater forested wetlands. A large factor in the poor track record was inadequate supervision which allowed the applicant to do nothing towards implementing the mitigation program. Secondary factors included poor design, lack of contiguity with existing wetlands, inadequate water flow across the project and inadequate monitoring to deter the intrusion by exotic and noxious plants. These factors are addressed in the DRAFT proposed permit here involved.

14. The programs and methods proposed for implementing the mitigation project is the culmination of some 10-15 years experience and learning involving the creation of wetlands. This learning and experience has been incorporated in the program here proposed. If incorporating the latest recognized techniques and procedures in the mitigation plan does not provide reasonable assurances that the mitigation project will succeed, no applicant for a permit to fill productive wetlands can be issued such a permit.

    
    

15. By removing the abandoned wastewater treatment plant and its associated sludge ponds, removing the ditches created to provide fill for the FPC right-of-way and road, placing culverts under the FPC road to facilitate the flow of water across this property, following the mitigation plan exactly, and placing the property under a conservation easement Petitioner has provided reasonable assurances that the granting of this permit will not be contrary to the public interests.

RECOMMENDATION

It is RECOMMENDED that permit (File No. 511731859) be issued to VQH Development, Inc. in accordance with and subject to the conditions contained in the DRAFT permit attached to the notice of Intent to Issue Permit.

DONE and ORDERED this 26th day of March, 1993, in Tallahassee, Leon County, Florida.

K. N. AYERS Hearing Officer

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-1550

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 26th day of March, 1993.

APPENDIX

Proposed findings submitted by Petitioner are accepted except:

18. Second sentence. Accepted as uncontradicted testimony of Petitioner's witness.

30. Rejected that there is a diminished overall value of these wetlands because of reduced or no understory.

36. First sentence rejected. No credible evidence was submitted that any historic wetlands on this property were filed by man.

38. First sentence rejected as confusing.

40. Third sentence rejected as fact; accepted as the testimony of VQH contractor.

61. Sentence 5(2) rejected as fact; accepted as a hoped for condition.

Proposed findings submitted by Respondent are accepted, except:

7. Whether red maple or laurel oak is the dominant species was disputed. However, both tree species are present in significant numbers and naming one dominant is irrelevant.

19. Whether red maple or laurel oak is the dominant species was disputed. However, both tree species are present in such significant numbers that naming one dominant is irrelevant.

Proposed findings submitted by Intervenor are accepted, except:

12. Property is rectangular in shape.

18. Last sentence rejected as contrary to witness' testimony.

20. Rejected as irrelevant. VQH project has been approved in principle by Pasco County.

22. Rejected as irrelevant. VQH project has been approved in principle by Pasco County.

28. I would characterize the mitigation proposals as neo-typical.

34. Second sentence rejected. Red maple and laurel oak dominate site.

38. Second and third sentences irrelevant as to cause of thin understory.

60. Rejected as fact. This is a conclusion of law.

62.-66. Rejected as fact. These are conclusions of law.

1. Accepted as unwritten rule.

2. Unwritten rule not proved valid in these proceedings. 68d. Last sentence. See HO #14.

3. Rejected as f act. This is a legal conclusion.

4. Rejected. This opinion of one witness is in conflict with the actions of DER in this instance.

83. Absent a definition of success the opinion here conflicts with the testimony of BRA's expert.

96.-99. These are legal conclusions.

101.-102. Rejected. VQH submitted numerous plans showing the reduction of the footprint on wetlands.

103. Rejected. Mudano also testified that the property on which all such stand alone stores are owned by the store.

105. Word practical rejected.

107. Rejected. Notice of Intent to Issue carries with it the conclusion that the project had been minimized as required by statutes.

1. This is a conclusion of law.

2. Rejected.

115. The date of February 1, 1993 a time to start on this project was not mentioned in this hearing. See HO #23.

117. While this mitigation plan may be consistent with present day requirements it is much more complex and detailed than were former mitigation plans which did not meet expectations.

118.-119. Rejected.

120. Conclusion of Law.

122. Conclusion of Law.

122. (Second) Last sentence rejected.

124. Rejected.

126.-128. Conclusions of Law.

130. Rejected.

132.(first)-134. Conclusions of Law. 133.-134. Conclusions of Law.

COPIES FURNISHED:

John W. Wilcox, Esquire Post Office Box 3273 Tampa, Florida 33601 3273

E. Gary Early, Esquire Post Office Box 10555

Tallahassee, Florida 32302 2555

Buddy Blair, Esquire

202 Madison Street Tampa, Florida 33602

W. Douglas Beason, Esquire Assistant General Counsel

Department of Environmental Regulation 2600 Blairstone Road

Tallahassee, Florida 32399 2400

Thomas W. Reese, Esquire

123 Eighth Street North

St. Petersburg, Florida 33701

Daniel H. Thompson, Esquire Acting General Counsel

Department of Environmental Regulation 2600 Blairstone Road

Tallahassee, Florida 32399 2400

Virginia B. Wetherell, Secretary Department of Environmental Regulation 2600 Blairstone Road

Tallahassee, Florida 32399 2400

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions to this Recommended Order. All agencies allow each party at least 10 days in which to submit written exceptions. Some agencies allow a larger period within which to submit written exceptions. You should contact the agency that will issue the final order in this case concerning agency rules on the deadline for filing exceptions to this Recommended Order. Any exceptions to this Recommended Order should be filed with the agency that will issue the final order in this case.

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AGENCY ORDER OF REMAND

=================================================================

STATE OF FLORIDA

DEPARTMENT OF ENVIRONMENTAL REGULATION

VQH DEVELOPMENT, INC.,

Petitioner,

OGC CASE NO. 92-2243

vs. DOAH CASE NO. 92-7456

STATE OF FLORIDA DEPARTMENT OF ENVIRONMENTAL REGULATION,

Respondent,

and

MANASOTA-88, INC.,

Intervenor.

/

ORDER OF REMAND

On March 26, 1993, a Hearing Officer from the Division of Administrative Hearings submitted his Recommended Order to the Department of Environmental Regulation ("Department") and all other parties to this action. A copy of the Recommended Order is attached as Exhibit "A." The Hearing Officer recommended that the Department grant the application of VQH Development, Inc., ("VQH") for a dredge and fill permit to fill eleven acres of a mature high quality red maple forested wetlands far the development of a shopping center. All parties filed exceptions to the Recommended Order. The Department filed a response to the exceptions of Intervenor, Manasota-88, Inc. ("M-88"). VQH filed responses to the exceptions of both M-88 and the Department. The Department filed a motion to strike VQH's response to the Department's exceptions, and also filed a motion for remand. The matter thereupon came before me as the Secretary of the Department.

1. BACKGROUND

   
   

   The site of VQH's proposed project is a 94 acre tract in Pasco County. The tract is comprised of both uplands and forested wetlands, and is located on the east side of U.S. Highway 19 in the City of Holiday, one mile north of the Pasco County border with Pinellas County.

   
   

   The site has 52.52 acres of forested wetlands located along a drainage divide; these drain to both the Anclote River on the east and the Gulf of Mexico on the west through a series of ditches, roadway culverts, canals, and natural wetlands. The wetlands are mature, red maple dominated swamps typical of the Anclote River flood plain. The site previously included cypress as evidenced by the number of remaining stumps, but appears to have been logged within the last

   40 years. The canopy is currently dominated by red maple; also present are sweet bay, water oak, swamp laurel oak, water tupelo and cabbage palms.

   
   

   After the Department denied the initial application, the Department suggested modifications to reduce wetland impacts, and VQH modified the project to reduce the wetlands to be filled from 14 acres to 11 acres. The Department then published an intent to issue and M-88 timely petitioned to intervene.

   
   

   All the parties agreed and stipulated that the project does not impact any Outstanding Florida Waters and will not result in violations of state water

   quality standards. The parties also agreed and stipulated that the project will have no adverse impacts on (1) threatened or endangered species, (2) navigation, flow of water, erosion or shoaling, or (3) significant historical and archaeological resources.

   
   

   VQH's tract has an uplands area which would be the site of the development. VQH proposes to fill 8.9 acres of forested wetlands between the uplands site and

   1. Highway 19. Also, 2.1 acres of wetlands would be filled for a road along the southern edge of the property.

      
      

      The 8.9 acre area between the uplands site and Highway 19 consists of hummocks originating from fallen trees or logs. The hardwood trees are located on the hummocks. Between the hummocks are deep pockets which contain water for extended periods. The wetland is a complex ecosystem. Due to the topography of the land, complex flow patterns, muck depths, and overall age of the system there is a high diversity of habitat for aquatic fauna and wetland dependent animals.

      
      

      The parties agree that absent mitigation the project would be contrary to the public interest and not permittable. To mitigate the adverse impacts VQH proposes to:

      
      

      1. Create and restore of 18.6 acres of forested wetlands from existing uplands;

      2. Create 2 acres of forested wetlands from an existing ditch;

      3. Create 2.95 acres of herbaceous wetlands from an existing ditch;

      4. Create 1.49 acres of shrubbery wetlands from uplands;

      5. Restore 0.75 acres of herbaceous wetlands;

      6. Restore 1.55 acres of mesic and hardwood wetlands;

      7. Place a conservation easement over 110.8 acres which comprise:

         1. All of the 34.6 acres of the project's created, restored and converted wetlands;

         2. The 60.78 acres of remaining wetlands and uplands on the site; and

         3. 15.42 acres of connected wetlands within a Florida Power Corporation easement.

      8. Improve the hydrologic connection of the created, restored and converted wetlands to adjacent wetlands; and

      9. Remove an abandoned wastewater treatment plant and drainage field which is a present source of pollution in the area.

   
   

2. RULING ON THE DEPARTMENT'S MOTION TO STRIKE

   
   

   The Department moved to strike VQH's response to the Department's exceptions on the ground that the response was not served within the ten day period provided by Rule 17-103.200(1), Fla. Admin. Code. The Department served its exceptions on VQH by U.S. Mail on April 12, 1993. Rule 17-103.080, Fla.

   Admin. Code provides that the time for service of pleadings shall be computed in accordance with Rule 1.090(e), Fla. R. Civ. Procedure, which provides that five

   days shall be added to a time for service of responsive pleadings when served by

   U.S. Mail. Therefore, the deadline for VQH to serve its response to the Department's exceptions was April 27, 1993. VQH's response was served on April

   26 and was therefore timely. Accordingly, the Department's motion to strike is denied.

   
   

3. RULINGS ON EXCEPTIONS OF M-88

   
   

   1. M-88 Exception No. 1

      
      

      M-88 first excepts to the Hearing Officer's Finding of Fact No. 36 insofar as it states that Carol Browner, my predecessor, made the ultimate decision to grant the permit application. M-88 contends that the only evidence to support such a finding is hearsay and that it must therefore be rejected. M-88 notes that the intent to issue was signed by Janet Llewellyn, the Chief of the Bureau of Wetlands Resource Management, and contends the testimony of Connie Bersok, to the effect that former Secretary Browner had made the determination to issue the permit, is mere hearsay. (Ex. 12, Pre-filed Test. of Connie Bersok at 11)

      
      

      The record contains competent substantial evidence that it was the practice of the Department in permits of this type to have the Bureau Chief sign the intent to issue after consulting with and obtaining the approval of the Secretary. (Test. of Bersok, Tr. at 115) The record also contains competent substantial evidence that in this case former Secretary Browner had been involved and had approved the intent to issue. (Ex. 12, Bersok, Pre-filed Test. at 11, 17; Bersok, Tr. at 109-10; Ex. 23, Llewellyn, Pre-filed Test. at 4; Ex.

      17, Robert Stetler, Pre-filed Test. at 13).

      
      

      I do not agree with M-88 that the evidence that former Secretary Browner made the decision to issue the permit is hearsay. The testimony is not relied on by the Hearing Officer to prove the truth of facts asserted in some statement by former Secretary Browner. Rather, the evidence is relied upon by the Hearing Officer only to prove that former Secretary Browner participated in the review of the application and made the decision to issue the permit. Therefore, the evidence is not hearsay. Charles W. Ehrhardt, Florida Evidence at pp. 513-14 (1992 Ed.). Accordingly, I reject this exception.

      
      

   2. M-88 Exceptions Nos. 2 and 7

      
      

      Exception No. 2 takes exception to the Hearing Officer's rejection of M- 88's proposed findings of fact Nos. 68 and 70. The Hearing Officer rejected proposed finding of fact No. 68 as non-rule policy the existence of which was not proved in the hearing. (Rec. Order at 22) The Hearing Officer rejected proposed finding of fact No. 70 as an opinion of one witness in conflict with Department actions. M-88 asserts that the quoted testimony of Ms. Ann Redmond in its proposed findings of fact Nos. 68 and 70 is unrebutted evidence of Department policy which must be accepted.

      
      

      In connection with M-88's proposed finding of fact No. 68, Ms. Redmond's testimony is not evidence that the policy she was discussing was ever adopted by the Department. Ms. Redmond testified:

      
      

      Q: Does DER have a wetlands mitigation policy?

      
      

      A: Yes.

      Q: Could you please describe DER's wetlands mitigation policy.

      
      

      A: During the spring of 1990, following release of the mitigation report, 1/ I was instructed to draft more detailed guidance on the recommendations for policy and rule change that were presented in the report. The reason was that we were to be implementing the new secretary's initiatives, as they were described in the report (pages 23-25 of [Ex.

      16] Attachment B hereto). Because of a statutory change that described internal guidance memos as unadopted agency rules, that memo was never issued, although it had been presented to the secretary in final draft form. In the section that dealt with the issue of avoidance and minimization of impacts, the example that I developed to describe a situation where avoidance and minimization had not occurred was based upon this project. In essence it stated that avoidance and minimization of impacts do not mean turning a wetland site into usable upland development property, rather they would mean allowing impacts to wetlands that are necessary to allow the existing uplands on the site to be developed.

      
      

      (Ex. 16, Redmond, Pre-filed Test. at 8-9)(emphasis added) I cannot agree that the testimony proves that the Department has adopted the policy reflected in the memo drafted by Ms. Redmond. If anything, the testimony would suggest the contrary since it states the memo was never issued and, although presented to Secretary Browner in final draft form, makes no assertion that the Department ever adopted it as policy. Therefore I cannot say that the Hearing Officer erred in holding that this policy was not proved at the hearing, and I reject this exception as it relates to M-88's proposed finding of fact No. 68.

      
      

      Similarly, as to M-88's proposed finding of fact No. 70, Ms. Redmond's testimony quoted by M-88 does not support M-88's assertion that the Department has adopted the policy. Ms. Redmond testified:

      
      

      Q: Do you have an opinion whether the applicant has provided reasonable assurances the functions of the 11 acres proposed to be filled can be recreated?

      
      

      A: Yes.

      
      

      Q: What is your opinion?

      
      

      A: The wetlands proposed for destruction are very good quality, deep, freshwater hardwood forested wetlands. This site is all the more remarkable given that it is surrounded by an urban and residential development matrix. The study of permitted wetland mitigation that I

      conducted for the Department supports the contention that it is possible to create a freshwater wetland, but it also shows that the science of freshwater wetland creation from uplands is not sufficiently well understood to accurately predict whether a proposed design will, in fact, be successful. In my opinion, because of this uncertainty, permits to permanently destroy freshwater hardwood forested wetlands should only be issued in cases where mitigation techniques have been successful or clearly tending toward success up-front (see mitigation report recommendations for agency rule and policy change, p. 24, [Ex. 16] Attachment B); where the wetlands to be permanently destroyed are of low or moderate quality, such that the functions that they serve can likely be offset by wetland creation; or where the wetlands mitigation is for a small area of high quality wetlands that cannot be avoided. As stated above, while it is theoretically possible to create successful freshwater forested wetlands, I have not seen evidence in the form of existing freshwater forested mitigation projects that suggests that the loss of a this type of high quality system can be adequately offset through mitigation.

      
      

      (Ex. 16, Redmond, Pre-filed Test. at 16-17)(emphasis added) As the above testimony shows, Ms. Redmond, who was called as M-88's witness, was not asked and did not opine that her views reflected the policy of the Department.

      
      

      Nor does the testimony of Mr. Stetler, Ms. Llewellyn and Ms. Bersok cited by M-88 prove the non-rule policy which M-88 sought to have the Hearing Officer accept in proposed finding of fact Nos. 68 and 70. Although Mr. Stetler and Ms. Bersok thought the project was not permittable, they did not testify as to the claimed non-rule policy. Ms. Llewellyn testified that she was of the opinion that the project was not contrary to the public interest and therefore was permittable. (Ex. 23, Llewellyn, Pre-filed Test. at 6) Therefore, I reject the exception that the Hearing Officer erred in rejecting M-88's proposed finding of fact Nos. 68 and 70. 2/

      
      

      Exception No. 7 is similar to the above. It asserts that the Hearing Officer's acceptance of M-88's proposed finding of fact No. 116 shows that the intent to issue is inconsistent with Department policy concerning minimization of wetlands impacts. I conclude that M-88 is inferring too much. The Hearing Officer found that in this case much more extensive mitigation provisions were incorporated into the permit than in past permits. His acceptance of M-88's proposed finding that "the issuance of this permit is not consistent with the prior DER permitting decisions ..." appears to reflect no more than the Hearing Officer's recognition that more extensive mitigation provisions were included in this permit than in previous permits. This does not suggest that the issuance of the permit is contrary to Department policy. Exception No. 7 is therefore rejected.

      Exception No. 2 also asserts that the Hearing Officer erred in Paragraph 49 when he concluded as a matter of law that:

      
      

      The recommendation 3/ in Finding 30 that creation of new wetlands (from uplands) should only be accepted if the proposal includes features to ensure that it will be successful, is unreasonable and contrary to the rule above quoted [Rule 17-312.350(1)]. All witnesses recognized that the conversion of uplands to wetlands is not an exact science but includes art and frequently a little help from the weather. An extended dry period would doubtless wreak havoc on the best designed program of this sort.

      
      

      M-88 asserts that it is not unreasonable to require the applicant to ensure the success of mitigation when high quality, regionally rare wetlands are involved. Be that as it may, I am not at liberty to rewrite the statutes which govern the permitting of dredging and filling in wetlands. Sections 403.918, 403.919 and the applicable case law allow the Department to deny a wetlands dredge and fill permit if the applicant fails to provide reasonable assurance that water quality standards will not be violated and that the project is not contrary to the public interest taking into consideration mitigation as well as cumulative and secondary impacts. See, e.g., Council of Lower Keys v. Charley Toppino & Sons, Inc., 429 So.2d 67 (Fla. 3d DCA 1983); Conservancy v. A. Vernon Allen, Builder, Inc., 580 So.2d 772 (Fla. 1st DCA 1991), rev. den., 591 So.2d 631 (Fla. 1991).

      
      

      The requirement for reasonable assurance is not a requirement for an absolute guarantee. Manasota-88 v. Agrico Chemical Co., 12 FALR 1319, 1325 (DER OGC No. 87-0664, Feb. 19, 1990); McCormick, et al. v. City of Jacksonville, 12 FALR 960 (DER OGC No. 88-0389, Jan. 22, 1990). Reasonable assurance does not require an applicant to perform every known test. Booker Creek Preservation, Inc. v. Mobil Chemical Co., 481 So.2d 10, 13 (Fla. 1st DCA 1986). In Metropolitan Dade County v. Coscan Florida, Inc., 609 So.2d 644 (Fla. 3d DCA 1992) the court construed reasonable assurance as a "substantial likelihood."

      
      

      Webster's New International Dictionary (unabridged 2d ed.) defines "ensure" as "to make certain ... to guarantee." 4/ A substantial likelihood is less than a guarantee, and reasonable assurance does not require a guarantee. Therefore, I conclude the Hearing Officer's conclusion of law is well taken. No matter how meritorious, a policy which required an applicant to ensure or guarantee success of its mitigation before a permit could be issued would run contrary to the established law of reasonable assurance cited above. 5/ Accordingly, I must reject this exception on this point also. In sum, M-88's Exceptions Nos. 2 and

      7 are rejected in their entirety.

      
      

   3. M-88 Exceptions Nos. 3, 4 and 6

      
      

      M-88 takes exception to the Hearing Officer's Finding of Fact No. 16, which implies that economic viability is a relevant criterion in determining whether a project modification suggested by the Department is "practicable" within the meaning of Rule 17-312.060(10), Fla. Admin. Code. M-88 also takes exception to any implication that the only practicable use is the "highest and best use." 6/ Lastly, M-88 asserts the Hearing Officer committed reversible error in allowing expert testimony on this issue even though the testimony was not pre-filed as

      required by a prehearing order. I shall construe this latter exception as an implied claim that the proceedings "did not comply with essential requirements of law" as required by Section 120.57(1)(b)10., Florida Statutes, and denied M-

      88 its due process. If M-88 relied on the pretrial order and pre-filed testimony, it was denied an opportunity to present rebuttal evidence on the issue of economic viability of the project if further modified to reduce wetlands impacts.

      
      

      M-88 asserts that the Department is not authorized to consider economic viability in the issuance of a dredge and fill permit. VQH contends that only the applicant, and not the Department, is authorized to determine whether a proposed modification is "practicable."

      
      

      Rule 17-312.060(10), Fla. Admin. Code, provides in part:

      
      

      If the project, as designed, fails to meet the permitting criteria, the Department shall discuss with the applicant any modifications

      to the project that may bring the project into compliance with the permitting criteria. The applicant shall respond to the Department, in writing, as to whether or not the identified modification to the proposed project is practicable and whether the applicant will make the identified modification.

      (emphasis added)

      
      

      Section 403.918(2)(b), Florida Statutes, provides in part:

      
      

      If the applicant is unable to otherwise meet the criteria set forth in this section [i.e., the department, in deciding to grant or deny a permit, shall consider measures proposed by or acceptable to the applicant to mitigate adverse effects which may be caused by the project. (emphasis added)

      
      

      Under Section 403.918(2)(b), the Department is only required to consider mitigation if the applicant is "unable to otherwise meet" the water quality and public interest criteria of Section 403.918(2), Florida Statutes. If, for example, an applicant unreasonably refused to consider modifications to the project to reduce adverse impacts which were causing a project to be contrary to the public interest, then the applicant may be unwilling but it is not "unable" to meet the criteria of Section 403.918(2) and the Department could deny the permit without considering mitigation. Thus, Rule 17-312.060(10) provides that in order to qualify for a consideration of mitigation the applicant must demonstrate that the modification being proposed is not "practicable."

      
      

      "Practicable" means "capable of being used." (Webster's New International Dictionary, 2d Ed., Unabridged) "Practical" means "valuable in practice." (Id.) Ms. Redmond testified that the Department construed "practicable" as having the same meaning as it has under the federal dredge and fill regulations, i.e., it means "may be reasonably avoided." (Ex. 16, Redmond, Pre-filed Test. at 22-23) I conclude that the term practicable must have some economic attribute. A proposed modification which would remove all economic value of the project would be neither reasonable nor practicable. Whether a particular modification is

      practicable will be a mixed question of fact and law which ultimately must be decided by the Department on a case by case basis. 7/

      
      

      Therefore, I conclude that testimony as to the economic viability of a project if modified as suggested by the Department is relevant to the issue of whether the proposed modification is "practicable" within the meaning of Rule 17-312.060(10), Fla. Admin. Code. Accordingly, I find that the Hearing Officer

      did not err in concluding that the testimony on economic viability was relevant. Insofar as these exceptions imply that evidence of economic viability is not relevant to the issue of "practicability" I reject the exceptions.

      
      

      However, I agree with M-88 and accept the exception insofar as it infers that the proceedings did not comply with the essential requirements of law and that M-88 was denied due process when the Hearing Officer allowed VQH to introduce expert testimony on the issue of whether the modification suggested by the Department was practicable when the expert testimony was not pre-filed as required by a prehearing order. Assuming that M-88 relied on the prehearing order, it was unprepared and therefore denied a meaningful opportunity to present rebuttal evidence on this issue. Accordingly, I conclude that this proceeding must be remanded for such further evidentiary proceedings as are appropriate to give M-88 and the Department an opportunity to provide rebuttal expert testimony or other evidence on the issue of the practicability of the modifications suggested by the Department.

      
      

   4. M-88 Exception No. 5

      
      

      M-88 asserts that the permit should not be granted because the Hearing Officer accepted M-88's proposed finding of fact No. 115 which stated in part that:

      
      

      The project as currently proposed by VQH is not economically feasible or viable because VQH has admitted ... that if it is not permitted to begin the project prior to February 1, 1993, 'the project will fail because ... [VQH] cannot economically carry out the project for another year [because of certain mitigation requirements]' ... [and] [s]ince the currently proposed project is not feasible or viable, VQH can not meet the applicable minimization and avoidance criteria because there is no currently feasible or viable project against which to measure practical modifications.

      
      

      First of all, the Department cannot base its decision to either issue or deny an application on the ground that the project is not going to be profitable or economically feasible to the applicant. See generally Council of Lower Keys

      v. Charley Toppino & Sons, Inc., 429 So.2d 67 (Fla. 3d DCA 1983). Second, The Hearing Officer rejected the date in the above noted proposed finding. Without the date, the finding as accepted by the Hearing Officer has no significance. The exception is therefore rejected.

      
      

   5. M-88 Exception No. 8

      
      

      M-88 asserts that the Hearing Officer erred in rejecting M-88's proposed findings of fact Nos. 101 and 102, which stated that the Department could not

      lawfully consider the mitigation because VQH never responded in writing as to the practicability of the Department's suggested modification to the original proposal. In rejecting these proposed findings the Hearing Officer reasoned that VQH responded by submitting numerous plans showing the reduction of wetlands impacts from 14 acres to 11 acres. I agree with the Hearing Officer that the submission of revised plans showing reduced wetlands impacts may be a sufficient response to a modification proposed by the Department. To hold otherwise would be, in many cases, to elevate form over substance. This exception is rejected.

      
      

   6. M-88 Exception No. 9

      
      

      M-88 notes that the Hearing Officer accepted M-88's proposed finding of fact No. 131 which states:

      
      

      VQH has not provided reasonable assurances that there is a substantial likelihood it can comply with the conditions in the draft permit.

      
      

      VQH responds by noting that the Hearing Officer accepted VQH's proposed finding of fact No. 64 which states in part that:

      
      

      based upon the scope and level of detail provided by the applicant and the obvious financial resources to carry out the program of mitigation there is a substantial likelihood that the impacts to the 11 acre wetland can be offset and that there may ultimately be a net positive benefit to the state in terms of additional wetland acreage.

      
      

      The Hearing Officer also accepted VQH's proposed findings of fact Nos. 43-59, all of which are supported in the record by competent substantial evidence and would, in the absence of conflicting findings, support the Hearing Officer's finding and conclusion that VQH provided reasonable assurance that the project, when considered with the mitigation offered, is not contrary to the public interest.

      
      

      When a Hearing Officer accepts a proposed finding of fact in his ruling on a party's proposed findings of fact, the accepted finding of fact has the same legal significance whether or not it is incorporated in the body of the Hearing Officer's Recommended Order. Cullen v. Florida Audubon Society, 582 So.2d 1241, 1242 (Fla. 3d DCA 1991); Inverness Convalescent Center v. Dept. of Health and Rehabilitative Services, 512 So.2d 1011, 1015 (Fla. 1st DCA 1987). Therefore, the Hearing Officer's ultimate findings of fact and conclusions of law must be consistent with all of these findings of fact. To reject one or the other of these conflicting findings would be a re-weighing of the evidence which I am not at liberty to do. Heifetz v. Dept. of Business Regulation, 475 So.2d 1277, 1281 (Fla. 1st DCA 1985).

      
      

      M-88's exception is well taken. There is a clear and fundamental conflict between the Hearing Officer's finding and conclusion, on one hand, that reasonable assurance has been provided that in view of the mitigation the project is not contrary to the public interest, and his acceptance, on the other hand, of the finding that VQH has not provided reasonable assurance that it can carry out the mitigation conditions of the permit.

      In view of the above conflicting findings and conclusions of the Hearing Officer, I conclude that a remand for clarification is required. Manasota-88 v. Tremor, 545 So.2d 439 (Fla. 2d DCA 1989). I therefore accept this exception to the extent that the case will be remanded for clarification of the above conflicting findings and conclusions.

      
      

   7. M-88 Exception No. 10

      
      

      M-88 takes exception to the Hearing Officer's Conclusion of Law in Paragraph No. 53 which states:

      
      

      53. The programs and methods proposed for implementing the mitigation project is the culmination of some 10-15 years experience and learning involving the creation of wetlands. This learning and experience has been incorporated in the program here proposed. If incorporating the latest recognized techniques and procedures in the mitigation plan does not provide reasonable assurances that the mitigation project will succeed, no applicant for a permit to fill productive wetlands can be issued such a permit.

      
      

      M-88 correctly notes that the mere incorporation of latest recognized techniques is not enough to provide the necessary reasonable assurance for a permit to issue. There must be some evidence that the techniques will produce the desired result.

      
      

      I might agree with the exception if the only findings of fact by the Hearing Officer were those contained in the body of his recommended order. However, when the Hearing Officer ruled on VQH's proposed findings of fact, he accepted VQH's proposed findings of fact Nos. 43-59, all of which are supported in the record by competent substantial evidence. (Rec. Order at 3 and 21)

      
      

      As I noted above, when a hearing officer accepts a proposed finding of fact, the accepted finding of fact has the same legal significance as if it had been incorporated verbatim in the body of the hearing officer's recommended order.

      
      

      VQH's proposed findings of fact Nos. 43-59 established that:

      
      

      1. The hydrologic conditions necessary for the creation of a successful hydroperiod could be accurately

         established. (P.F.O.F. Nos. 43, 44; Ex. 11, Pre-filed Test. of K.A. Appenzeller at 12; Ex. 15, Pre-filed Test. of G.R. Best at 8);

         
         

      2. The scale of the project made it more likely to succeed. (P.F.O.F. No. 45, 47; Ex. 14, Pre-filed Test. of R. Callahan at 11-14; Tr. at 137);

         
         

      3. Extensive studies had been performed to determine the elevations necessary for a natural hydroperiod.

         (P.F.O.F. No. 46; Ex. 15 at 9, 13);

      4. Breaching a Florida Power Corporation berm and other changes to ditches and canals will allow a more natural flow of water onto the property. (P.F.O.F. No. 48; Ex. 14 at 14-16; Ex. 15 at 9);

         
         

      5. A water control structure to be built will maintain natural hydroperiod stage elevations. This control of hydroperiod will decrease plant mortality in the created wetlands. (P.F.O.F. No. 49; Ex. 11 at 13; Ex. 15 at 10);

         
         

      6. The planting of both small and large trees will increase the probability of success and allow for more rapid canopy development. (P.F.O.F. No. 50; Ex. 14 at 19-22);

         
         

      7. The planting of a herbaceous and shrubbery understory will allow the more rapid establishment of a natural understory ecosystem. (P.F.O.F. No. 51; Ex. 14 at

         19-22; Ex. 15 at 10);

         
         

      8. The transplanting of hummocks from the impact area will allow for the immediate transfer of many insect and invertebrate species and will provide microtopographical relief which will provide for a greater diversity of

         plant and animal species. (P.F.O.F. No. 52; Ex. 14 at 22-23; Ex. 15 at 10-11);

         
         

      9. The planting management plan will continue for a minimum of 5 years and provides for replanting to achieve a minimum of an 85 percent success rate. (P.F.O.F. No. 53; Ex. 14 at 28; Ex. 12, Amended Pre-filed Test. of C. Bersok, attached draft permit at 18-22, 26);

         
         

      10. Since the mitigation sites will be contiguous to the existing wetlands they will immediately become

          integrated with the hydrology of the existing wetlands. (P.F.O.F. No. 54; Ex. 15, at 8-9; Ex. 16, Pre-filed

          Test. of A. Redmond, Attachment 2 at 9-10);

          
          

      11. Once the mitigation sites mature, a contiguous wetland and wildlife corridor extending to the Anclote River

          will exist resulting in the creation of a large, contiguous and unimpeded wildlife, wetland and greenbelt corridor that will be of a great benefit in the area. (P.F.O.F. No. 55; Ex. 15 at 12-13);

          
          

      12. The mitigation will provide more effective stormwater treatment and attenuation than currently exists at the site, resulting in cleaner and improved water quality

          for stormwater as it reaches the Anclote River. (P.F.O.F. No. 56; Ex. 11 at 12, 14-15; Ex. 14 at 16-17);

          
          

      13. The removal of the abandoned wastewater treatment facility will improve water quality in the area. (P.F.O.F. No. 57; Ex. 14 at 26-27); and

      14. A conservation easement will be placed on all the created and restored wetlands as well as all the remaining wetlands on the 94 acre parcel ensuring perpetual protection. (P.F.O.F. No. 59; Ex. 12, Attachment Draft Permit; Ex. 14 at 12, 27).

      
      

      Therefore, in this case there was competent substantial evidence to support the Hearing Officer's findings and conclusion that the latest recognized techniques and procedures in the mitigation plan provide reasonable assurance of success. Since the findings which the Hearing Officer accepted are supported by competent substantial evidence, I am not at liberty to reject or reweigh them.

      
      

      See, e.g., Florida Department of Corrections v. Bradley, 510 So.2d 1122 (Fla. 1st DCA 1987); Heifetz v. Department of Business Regulation, 475 So.2d 1277, 1281 (Fla. 1st DCA 1985); Sections 120.57(1)(b)10., and 120.68(10),

      Florida Statutes.

      
      

      To the extent that this exception asserts that as a matter of law it is not enough for an applicant to merely incorporate the latest techniques in a mitigation plan without actually introducing evidence that the plan will work, I accept the exception. To the extent the exception implies that in this case such evidence was not introduced, I reject the exception.

      
      

   8. M-88 Exception NO. 11

      
      

      M-88 asserts that the Hearing Officer erred in characterizing M-88's proposed findings of fact Nos. 120, 122 [First], 132[A], 132[B], 133 and 134 as conclusions of law. I conclude that P.F.O.F. No. 120 is clearly a conclusion of law. It is no more than a legal construction that the test of reasonable assurance of success is whether a substantial likelihood of success has been shown.

      
      

      Reasonable assurance and the balancing of the public interest criteria are ultimately questions of law for the Department to decide. 1800 Atlantic Developers v. Department of Environmental Regulation, 552 So.2d 946 (Fla. 1st DCA 1989), rev. den., 562 So.2d 345 (Fla. 1990). Although there are underlying questions of fact in the ultimate determination of reasonable assurance, I cannot say that the Hearing Officer erred in characterizing M-88's proposed findings of fact Nos. 122 [First] and 132 [A] as conclusions of law.

      
      

      As to M-88's proposed findings of fact Nos. 132[B], 133 and 134, the issues of the permanency of the project, its effect on fishing and marine productivity, and the effect on conservation of fish and wildlife are factual issues.

      However, since the Hearing Officer expressly discussed and ruled on these issues in the body of his Recommended Order, any error in characterizing the statements as conclusions of law is harmless. See, e.g., Health Care Management Inc. v.

      Department of Health and Rehabilitative Services, 479 So.2d 193 (Fla. 1st DCA 1985); Schomer v. Department of Professional Regulation, 417 So.2d 1089 (Fla. 3d DCA 1982).

      
      

   9. M-88 Exceptions Nos. 12 and 13

      
      

      M-88 contends that VQH failed to meet its burden of proof to provide reasonable assurance that the project, taking into consideration the cumulative impacts of past, present and reasonably foreseeable projects in the same drainage basin, is not contrary to the public interest. Thus, M-88 takes exception to the Hearing Officer's Finding of Fact No. 14, and to VQH's proposed

      finding of fact No. 61 which the Hearing Officer accepted in part. Proposed Finding of Fact No. 61 as accepted by the Hearing Officer states:

      
      

      The evidence in this hearing demonstrates that there will be no adverse cumulative impacts resulting from this permit. Manasota-88's witnesses have speculated that this permit will "open the door" for other similar projects. (Exhibit 17, pp. 9-10; Exhibit 18, pp. 14-15.) However, those witnesses failed to consider that any future projects would have to meet the same standards for mitigation that are applied to VQH's project (Exhibit 23,

      p. 8.) The cumulative effects of a project are, by rule, subject to being offset through mitigation. (See, Rule 17-312.060(10), F.A.C.) Given the following: 1) that all adjoining properties down to the Anclote River will be subject to the conservation easement (Exhibit 23, p. 8) ... 3) that the mitigation may reasonably be expected to result in the reestablishment of historic wetlands and the creation of additional wetland acreage; 4) the benefits of enhanced stormwater treatment and attenuation; and 5) the creation of a large, intact wildlife and greenbelt corridor, I find that this project will not result in adverse cumulative impacts. 8/

      
      

      I note that the record contains competent substantial evidence that the project would not lead to unacceptable cumulative impacts. Ms. Llewellyn testified that:

      
      

      I do not feel, however, that this project would lead to unacceptable cumulative impacts. Any future projects proposed would be required to meet the same standard for mitigation as that included in this project. In addition, since all of the adjoining properties down to the Anclote River will be subject to a conservation easement, there is no likelihood that there will be any cumulative impacts on this wetland system beyond that being permitted in this case.

      
      

      Ex. 23, Pre-filed Test. of J. Llewellyn at 8. I conclude that the placement of a perpetual conservation easement over 110 acres, including all of the adjoining properties down to the Anclote River, provides reasonable assurance that there will be no future cumulative impacts.

      
      

      Even if there were future dredging and filling projects in this basin, it does not follow that the future projects would have to be permitted if this permit is issued. As the Department noted in Peebles v. Department of Environmental Regulation, 12 FALR 1961, 1967 (April 10, 1990) "each future application must stand on its own merit and must provide anew the necessary reasonable assurances subject to cumulative impact analysis."

      I also note that the Hearing Officer found that in this case the project would actually result in increased water quality in the drainage basin because of the removal of the abandoned domestic waste treatment plant, and because of improved stormwater treatment.

      
      

      I agree with the Hearing Officer's conclusion that the analysis of cumulative impacts does not render this project contrary to the public interest. Accordingly, I reject these exceptions.

      
      

   10. M-88 Exception No. 14

   
   

   M-88 takes exception with the provision of the draft permit that provides that the created forested wetlands are to be planted with 30 percent cypress and

   30 percent pop ash. M-88 asserts that there is no evidence that cypress was ever present and that pop ash does not represent 30 percent of the existing canopy. M-88 contends that Rule 17-312.340(1)(b), Fla. Admin. Code, requires wetlands creation projects to use the same type of trees.

   
   

   In fact, Rule 17-312.340(1)(b) allows more discretion. It provides that wetlands creation projects to offset adverse impacts will:

   
   

   usually be best addressed through protection, enhancement or creation of the same type of waters (e.g., Spartina marsh, Cypress swamp, etc.). However, where the waters being affected have been significantly altered by human activity ... a mitigation proposal utilizing other types of waters may be considered. (emphasis added)

   
   

   In this case the Hearing Officer, although noting that the prior dominance of cypress has not been established, found that there was evidence of the previous existence of cypress which had apparently been logged out some forty years earlier. (Rec. Order, Findings of Fact Nos. 9 and 10)

   
   

   Therefore, I conclude that the draft permit conditions specifying types of trees and percentage coverage are in compliance with the discretion allowed by Rule 17-312.340(1)(b). The exception is therefore rejected.

   
   

4. RULINGS ON EXCEPTIONS OF VQH

   
   

   1. VQH Exception No. 1

      
      

      VQH takes exception to the Hearing Officer's statement in Finding of Fact No. 17 that "the principal issue to be decided is whether the proposed mitigation ... has a substantial probability of success." VQH asserts that this is a new test or criteria for reasonable assurance. I do not agree that this is a new test for the same reasons stated in Part III(2) above. 9/ Therefore, I reject this exception.

      
      

   2. VQH Exception No. 2

      
      

      VQH excepts to the Hearing Officer's Finding of Fact No. 21 insofar as it may imply that that only one gallon size trees will be planted on 6 foot centers. VQH notes that the plan in the draft permit and testified to at the hearing also called for planting of three gallon trees at six foot centers over

      25 percent of the site, and that more mature wetland trees will be planted at

      ten foot centers over 25 percent of the site. (Ex. 14, Pre-filed Test. of R. Callahan at 20-21; Ex. 12, Pre-filed Test. of C. Bersok, Attached Draft Permit at 9-11) I also note that the plan called for irregular spacing to create a more natural effect. (Ex. 14 at 21)

      
      

      There is no disagreement among the parties as to the above noted comments by VQH. Therefore, I accept this exception and conclude that in the event the permit eventually issues after final disposition upon remand, the planting density and methodology set forth in the Draft Permit shall be followed.

      
      

   3. VQH Exception No. 3

      
      

      VQH excepts to Finding of Fact No. 22, which states that there were certain inconsistencies between the testimony of VQH's witnesses and the terms of the draft permit. The finding does not clearly identify the referred to inconsistency. The only potentially inconsistent testimony I found was Mr.

      Callahan's testimony that consideration was being given to using nursery grown tree stock rather than tree-spading material if the timing of the permit issuance were to preclude tree spading. (Tr. at 123-124.) However, Mr.

      Callahan later acknowledged that tree-spading would be performed in accordance with the permit in the absence of a modification to the permit issued by the Department. (Tr. at 137) Since Mr. Callahan ultimately testified that the terms of the draft permit would control and be complied with (Tr. at 137), I conclude that the Hearing Officer did not find the inconsistencies to be material. Since there are no material inconsistencies, the exception is rejected.

      
      

   4. VQH Exception No. 4

      
      

      VQH takes exception to Finding of Fact No. 34, which states that VQH is being required to post a bond in the amount of $440,000 as financial assurance for the success of the mitigation. VQH asserts that there is no competent substantial evidence in the record to support a finding that VQH will post a bond. Rather, VQH asserts, the record reflects that the required financial assurance will be provided through a corporate guarantee as provided in the draft permit attached to the Intent to Issue. (Ex. 12, Amended Pre-filed Test. of Bersok, Attachment (unnumbered))

      
      

      The Hearing Officer obviously placed some weight on the financial assurance provided by a $440,000 performance bond when he weighed the mitigation and its probability of success against the adverse effects of the project. I note that a performance bond provides considerably greater assurance than a corporate guarantee. Although both are permissible under Rule 17-312.390, Fla. Admin.

      Code, the Hearing Officer may properly give greater weight to a bond than to a corporate guarantee when he or she determines whether reasonable assurances have been provided that the mitigation will successfully offset the adverse impacts of the project.

      
      

      I cannot say whether the Hearing Officer would have reached the same conclusion if he knew that the financial assurance was a corporate guarantee rather than a performance bond. Nor am I permitted to reweigh the evidence. Heifetz v. Dept. of Business Regulation, 475 So.2d 1277, 1281 (Fla. 1st DCA 1985). Therefore, I conclude that a remand is necessary for the Hearing Officer to reweigh the evidence in the light that a corporate guarantee rather than a performance bond is being offered as financial assurance. Manasota-88 v.

      Tremor, 545 So.2d 439 (Fla. 2d DCA 1989). Accordingly, the exception is rejected except that the proceeding will be remanded for a re-determination of

      whether reasonable assurances have been provided that the mitigation will be accomplished, thereby offsetting the adverse impacts and rendering the project not contrary to the public interest.

      
      

   5. VQH Exception No. 5

   
   

   VQH takes exception to the conclusions of law in Paragraphs 51 and 52 of the Recommended Order. VQH contends that the Hearing Officer's conclusion that reasonable assurance of mitigation success requires a substantial likelihood of success creates a new, more stringent test for reasonable assurance. I disagree. Although, as previously noted, it is well established that reasonable assurance does not require an absolute guarantee or the performance of every known test, I concur with the Third District Court of Appeal's view in Metropolitan Dade County v. Coscan, Florida, 609 So.2d 644 (Fla. 3d DCA 1993) that reasonable assurance means at least a substantial likelihood that the project will not result in violations of water quality standards and will satisfy the public interest test of Section 403.918(2), Florida Statutes. The exception is therefore rejected.

   
   

5. RULING ON THE DEPARTMENT'S EXCEPTION AND MOTION FOR REMAND

   
   

   The Department excepted and moved to remand this proceeding to the Division of Administrative Hearings for additional findings as to the sufficiency of the proposed mitigation. The Department's exception and motion are grounded on the belief that the Hearing Officer did not make findings of fact sufficient to support his finding and conclusion that reasonable assurance had been provided that the mitigation proposed would sufficiently offset the adverse impacts of the project so that the project would not be contrary to the public interest.

   Thus, the Department's exception and motion stated that "a permit applicant cannot meet its burden of demonstrating reasonable assurance by simply establishing that its mitigation proposal incorporates various recognized techniques and procedures."

   
   

   I reject this exception for the same reasons discussed in my ruling on M- 88's Exception No. 10 in Part 111(7) above. On the other hand, as I noted above, remand is necessary to resolve conflicting findings of fact on the issue of whether reasonable assurance was provided that the applicant could successfully carry out the proposed mitigation, to reweigh the factors as to reasonable assurance in the light of the fact that a corporate guarantee rather than a bond is proposed, and for possible further evidentiary proceedings if either the Department or M-88 wish to present rebuttal expert testimony on the issue of economic viability.

   
   

   Accordingly, the motion to remand is granted for the reasons stated in my rulings on M-88's Exceptions Nos. 4 and 9 (Part III(3) and (6) herein) and VQH's Exception No. 4 (Part IV(4) herein).

   
   

6. CONCLUSION

A remand is necessary to resolve conflicting findings of fact on the issue of whether reasonable assurance was provided that the applicant could successfully carry out the proposed mitigation, to reweigh the factors as to reasonable assurance in the light of the fact that a corporate guarantee rather than a bond is required, and for possible further evidentiary proceedings if either the Department or M-88 wish to present rebuttal expert testimony on the issue of economic viability.

ACCORDINGLY IT IS ORDERED THAT:

1. Except as is otherwise stated in this order of remand, the Hearing Officer's Recommended Order is adopted and incorporated herein by reference.

   
   

2. The Department's motion to strike VQH's response to the Department's exceptions is denied.

   
   

3. The Department's motion for remand is granted and this proceeding is hereby remanded to the Division of Administrative Hearings for further proceedings consistent with the provisions of this order as may be necessary and appropriate.

DONE AND ORDERED this 10th day of May, 1993, in Tallahassee, Florida

STATE OF FLORIDA DEPARTMENT OF ENVIRONMENTAL REGULATION

VIRGINIA B. WETHERELL SECRETARY

Twin Towers Office Building 2600 Blair Stone Road

Tallahassee, Florida 32399-2400

FILING AND ACKNOWLEDGMENT

FILED, on this date, pursuant to S. 120.52 Florida States, with the designated Department clerk, receipt of which is hereby acknowledged.

5-10-93

Clerk Date

ENDNOTES

1/ The mitigation report is DER's legislatively mandated Report on the Effectiveness of Permitted Mitigation dated March 6, 1991 (Attachment B to Exhibit 16).

2/ In so doing, I merely hold that the Hearing Officer did not err in rejecting M-88's proposed findings on the ground that any such non-rule policy was not proven at the hearing. Nothing herein shall preclude the Department from considering such policy in another proceeding.

3/ The recommendation involved is the recommendation in DER's legislatively mandated Report on the Effectiveness of Permitted Mitigation dated March 5, 1991 (Attachment B to Exhibit 16). The specific recommendation at p.24 of the report is that:

Creation should only be accepted if review of the creation proposals indicated that it includes features to insure [sic] that it will

be successful. In all cases, if the proposed mitigation does not provide reasonable assurances that the wetland losses can be offset, the project should be denied.

4/ As noted above, the DER mitigation report used the word "insure" rather than "ensure." Both are defined as meaning to guarantee.

5/ This does not mean that a permittee may not be required as a condition of the permit to continue its mitigation efforts until the mitigation achieves reasonable success criteria specified in the permit.

6/ VQH's expert witness testified that "economic viability" was equivalent to the highest and best use. (Test. of R.L. Benware, Tr. at 53-54).

7/ I do not agree with VQH's contention that in order for a modification to be practicable it must allow the applicant the highest and best use of the site. A property owner is not even entitled to the highest and best use in a takings case. Graham v. Estuary Properties, Inc., 399 So.2d 1374 (Fla. 1981), cert. den., 454 U.S. 1083 (1981).

Nor do I hold that economic viability is the sole factor to consider in determining that a proposed modification would render a project not practicable. Furthermore, a property owner is not entitled to a permit merely because further modification to reduce wetlands impacts would render a project not practicable. The applicant must still provide reasonable assurance that water quality standards will not be violated and that the project meets the public interest test of Sections 403.918(2) and 403.919, Florida Statutes.

8/ Clause "2)," which was rejected by the Hearing Officer, stated: "2) that this project will completely offset the impacts of the fill activity."

9/ "Likelihood" means "something probable ... a probability." (Webster's New International Dictionary, Second Edition, Unabridged) Therefore there is no material difference between the Hearing Officer's use of "substantial probability" and the court's use of "substantial likelihood" in Metropolitan Dade County v. Coscan Florida, Inc., 609 So. 2d 644 (Fla. 3d DCA 1992).

CERTIFICATE OF SERVICE

I HEREBY CERTIFY THAT A TRUE AND CORRECT COPY OF THE FOREGOING HAS BEEN FURNISHED TO THE FOLLOWING PERSONS ON THIS 10th DAY OF MAY, 1993:

BY HAND DELIVERY TO:

THE HONORABLE K.N. AYERS HEARING OFFICER

DIVISION OF ADMINISTRATIVE HEARINGS DESOTO BUILDING

1230 APALACHEE PARKWAY

TALLAHASSEE, FLORIDA 32399-1550

CLERK, DIVISION OF ADMINISTRATIVE HEARINGS DESOTO BUILDING

1230 APALACHEE PARKWAY

TALLAHASSEE, FLORIDA 32399-1550

W. DOUGLAS BEASON, ESQUIRE ASSISTANT GENERAL COUNSEL STATE OF FLORIDA DEPARTMENT OF ENVIRONMENTAL REGULATION TWIN TOWERS OFFICE BUILDING 2600 BLAIR STONE ROAD

TALLAHASSEE, FLORIDA 32399-2400

AND BY U.S. MAIL TO:

ATTORNEYS FOR PETITIONER:

JOHN W. WILCOX, ESQUIRE E. GARY EARLY, ESQUIRE AKERMAN, SENTERFIT AKERMAN, SENTERFIT

POST OFFICE BOX 3273 POST OFFICE BOX 10555

TAMPA, FLORIDA 33601-3273 TALLAHASSEE, FLORIDA 32302-2555

L.M. BUDDY BLAIN, ESQUIRE BLAIN & CONE

202 MAIDEN STREET TAMPA, FLORIDA 33602

ATTORNEY FOR INTERVENOR THOMAS W. REESE, ESQUIRE

123 EIGHT STREET NORTH

ST. PETERSBURG, FLORIDA 33701

STATE OF FLORIDA, DEPARTMENT OF ENVIRONMENTAL REGULATION

ROBERT G. GOUGH

ASSISTANT GENERAL COUNSEL 2600 BLAIR STONE ROAD

TALLAHASSEE, Florida 3299-2400 FLORIDA BAR NO. 410489

(904)488-9730

================================================================= DOAH ORDER ACCEPTING REMAND AND REOPENING FILE

=================================================================

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

VQH DEVELOPMENT, INC., )

)

Petitioner, )

)

vs. ) CASE NO. 92-7456

) STATE OF FLORIDA DEPARTMENT ) OF ENVIRONMENTAL REGULATION, )

)

Respondent, )

and )

)

MANASOTA-88, INC., )

)

Intervenor. )

)

ORDER ACCEPTING REMAND AND REOPENING FILE

THIS CAUSE came on for consideration of Order of Remand from Respondent.

The premises considered, it is ORDERED:

1. The Order of Remand is accepted to consider the limited issues for which this case was remanded, and the file of the Division of Administrative Hearings is reopened.

   
   

2. The hearing on remand will be scheduled in a Notice of Hearing issued concurrently herewith.

DONE and ORDERED this 14th day of May, 1993, in Tallahassee, Leon County, Florida.

K. N. AYERS Hearing Officer

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-1550

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 14th day of May, 1993.

COPIES FURNISHED:

John W. Wilcox, Esquire Post Office Box 3273

Tampa, Florida 33601-3273

E. Gary Early, Esquire Post Office Box 10555

Tallahassee, Florida 32302-2555

Buddy Blair Esquire

202 Madison Street Tampa, Florida 33602

W. Douglas Beason, Esquire Assistant General Counsel

Department of Environmental Regulation 2600 Blairstone Road

Tallahassee, Florida 32399-2400

Thomas W. Reese, Esquire

123 Eighth Street

St. Petersburg, Florida 33701

=================================================================

RECOMMENDED ORDER ON REMAND

=================================================================

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

VQH DEVELOPMENT, INC., )

)

Petitioner, )

)

vs. ) CASE NO. 92-7456

)

DEPARTMENT OF ENVIRONMENTAL )

REGULATION, )

)

Respondent, )

and )

)

MANASOTA-88, INC., )

)

Intervenor. )

)

RECOMMENDED ORDER ON REMAND

Pursuant to notice the Division of Administrative Hearings by its duly designated Hearing Officer, K. N. Ayers, held a formal hearing in the above- styled case on June 9, 1993 to comply with the Order of Remand from the Department of Environmental Regulation dated May 10, 1993.

APPEARANCES

For Petitioner: John W. Wilcox, Esquire

Suite 1500, 100 South Ashley Avenue

Tampa, Florida 33602-3511

and

E. Gary Early, Esquire Post Office Box 10555

Tallahassee, Florida 32302-2555

For Respondent: W. Douglas Beason, Esquire

2600 Blair Stone Road Tallahassee, Florida 32399-2410

For Intervenor: Thomas W. Reese, Esquire

123 Eighth Street North

St. Petersburg, Florida 33701 STATEMENT OF THE ISSUES

To allow Respondent and Intervenor to present evidence to rebut opinion testimony, which had not been pre-filed by Petitioner, that modification to the application suggested by the Department was not practicable.

PRELIMINARY STATEMENT

Following the initial hearing conducted February 24 and 25, 1993, a Recommended Order was entered which, in Finding of Fact No. 16 found:

The testimony of Petitioner's witness that reducing the footprint of the proposed development from 13+ acres to 8.9 acres constituted the minimum area for the proposed shopping center to be economically viable was not rebutted, although several DER employees opined that the project had not been adequately minimized.

At the commencement of this hearing on remand VQH submitted a motion in limine to limit DER and M-88 evidence relating to the economic viability of proposed modifications. After a discussion of the issues to be considered the Hearing Officer stated at p. 9 of transcript

"I don't have any problem with presenting evidence today, with respect to the economic viability of a smaller footprint" to which DER attorney responded "Okay . . . I don't know if I have a quarrel with what you're saying".

No specific ruling was made on the motion in limine.

At the initial hearing one of VQH witnesses who testified that to be successful the project had to be clearly visible and accessible from US 19 was Richard W. Benware who was offered as a fact witness and did not submit pre- filed testimony which was required for all expert witnesses. It is to give DER and M-88 an opportunity to rebut the testimony of Mr. Benware that moving the project eastward and further from US 19 would result in the project not being economically viable is the primary reason this case was remanded. In the Order of Remand the Secretary stated at p. 13-14:

M-88 takes exception to the Hearing Officer's Finding of Fact No. 16, which implies that economic viability is a relevant criterion in determining whether a project modification suggested by the Department is "practicable" within the meaning of Rule 17-312.060(10), Fla. Admin. Code. M-88 also takes exception to any implication that the only practicable use is the "highest and best use". (footnote admitted) Lastly, M-88 asserts the Hearing Officer committed reversible error in allowing expert testimony on this issue even though the testimony was not pre-filed as required by a pre-hearing order. I shall construe this latter exception as an implied claim that the proceedings "did not comply with the

essential requirements of law" as required by Section 120.57(1)(b)10., Florida Statutes, and denied M-88 its due process. If M-88 relied on the pretrial order and pre-filed testimony, it was denied an opportunity to present rebuttal evidence on the issue of economic viability of the project if further modified to reduce wetlands impacts.

Further at p. 17 of the Order of Remand the Secretary stated:

Therefore, I conclude that testimony as to the economic viability of a project if modified as suggested by the Department is relevant to the issue of whether the proposed modification is "practicable" within the meaning of Rule 17- 312.060(10), Fla. Admin. Code. Accordingly, I find that the Hearing Officer did not err in concluding that the testimony on economic viability was relevant. Insofar as these exceptions imply that evidence of economic viability is not relevant to the issue of "practicability" I reject the exceptions.

However, I agree with M-88 and accept the exception insofar as it infers that the proceedings did not comply with the essential requirements of law and that M-88 was denied due process when the Hearing Officer allowed VQH to introduce expert testimony on the issue

of whether the modification suggested by the Department was practicable when the expert testimony was not pre-filed as required by a pre-hearing order. Assuming that M-88 relied on the pre-hearing order, it was unprepared and therefore denied a meaningful opportunity to present rebuttal evidence on this issue.

Accordingly, I conclude that this proceeding must be remanded for such further evidentiary proceedings as are appropriate to give M-88 and the Department an opportunity to provide rebuttal expert testimony or other evidence on the issue of the practicability of the modifications suggested by the Department.

Finally, in CONCLUSION the Order of Remand stated:

A remand is necessary to resolve conflicting Findings of Fact on the issue of whether reasonable assurance was provided that the applicant could successfully carry out the proposed litigation, to reweigh the factors as to reasonable assurance in the light of the fact that a corporate guarantee rather than a bond is required, and for possible further evidentiary proceedings if either the Department or M-88 wish to present rebuttal expert testimony on the issue of economic viability. (emphasis added)

These extensive quotes from the Order of Remand are repeated solely to clarify the phrase "or other evidence on the issue of practicability of the modifications suggested by the Department". That evidence relates to the economic viability of the project if moved eastward to reduce the impact on the wetlands.

A second reason for remand of this matter resulted from the Hearing Officer inadvertently accepting M-88's proposed finding of fact No. 131 which states:

VQH has not provided reasonable assurances that there is a substantial likelihood that

it can comply with the conditions in the draft permit.

This proposed finding is inconsistent with the facts noted in Hearing Officer's Findings 17 through 35 and Conclusions of Law No. 54. Accordingly, M- 88's proposed finding of fact No. 131 is now rejected.

A third reason for remand is the Hearing Officer's finding No. 34 which erroneously stated that the draft permit required Petitioner to post a bond of

$440,000 before commencing the mitigation project. The draft permit actually requires the Petitioner to post a corporate guarantee in this amount as financial security for completion of the proposed mitigation project.

At this hearing Petitioner called two witnesses on the issue of financial security for the mitigation project, two witnesses on the economic viability of the project and one witness on various meetings between Petitioner and DER;

Respondent called one witness who testified on "practicability" of further minimization; Intervenor called two witnesses who also testified on practicability of further minimization; and twelve exhibits were offered into evidence. All exhibits were admitted except Exhibit 7 to which objection on grounds of relevance was sustained. Exhibits 2A and 3A increased the ten numbered exhibits to twelve.

Having fully considered all evidence submitted in compliance with the Order of Remand, I submit the following:

FINDINGS OF FACT

1. M-88's proposed finding No. 131 submitted following the February 24, 25, 1993, hearing is rejected as unsupported by the evidence.

   
   

2. VQH will provide a corporate guarantee in the amount of $440,000 to guarantee completion of the mitigation project. This guarantee will apply during the life of the mitigation project, even if the property is sold. In the event the Department would prefer the posting of a bond to provide the same guarantee as the corporate guarantee VQH has agreed to provide the bond.

   
   

3. Following the issuance of the Notice of Permit Denial in October 1991 to fill wetlands to develop the property as proposed by VQH, several meetings were held between VQH and the Department.

   
   

4. At these meetings DER demanded the project be further minimized to reduce the impact on the wetlands before VQH could be issued a permit.

   
   

5. On February 28, 1992 Petitioner submitted a revised conceptual plan which was reviewed and found to adequately address the recommended changes in the Notice of Permit Denial. The Department, in a letter dated April 27, 1992, (Exhibit 2) forwarded to VQH the evaluation of the February 28, 1992 proposal which recommended a further reduction in the wetlands impact of the project from

   13.5 acres to 8.5 to 9 acres.

   
   

6. At a meeting on May 6, 1992 the plan dated May 5, 1992 (Exhibit 8) was presented to the Department and additional modifications were discussed to further reduce the wetlands impact.

   
   

7. At both of these earlier meetings the Department suggested that the project be moved further eastward (further from US 19) which VQH rejected as not a viable alternative to constructing a shopping mall that can succeed.

   
   

8. Following the May 6, 1992 meeting VQH presented a final plan dated May 8, 1992 incorporating the changes discussed at the May 6 meeting. Some staff members were disappointed that the May 8 plan did not make greater reduction of the wetlands impact but it was agreed to present this plan to Secretary Browner on May 11, 1992. This plan reduced the wetlands impact of the project to 8.9 acres and on May 11, 1992 this was accepted by the Department as the minimum wetlands impact necessary to construct the proposed project. Thereafter the parties concentrated on the mitigation necessary to meet the statutory public interest criterion to compensate for the loss of these productive wetlands.

   
   

9. At the hearing on remand the Department presented Exhibits 2A and 3A which are transparent overlays with the projected footprint of the development on the transparencies. Placing these overlays on the plat of the property showing DER wetlands jurisdiction lines showed that by moving the proposed

   development to the east the wetlands impact could be further reduced. However, no witness was offered by either DER or M-88 to opine that such relocation of the footprint represented an economically viable shopping center.

   
   

10. On the other hand, Frank R. Mudano, Petitioner's architect who designed the shopping center and who testified as an expert in shopping center development and operations at the February hearing, opined that none of the different locations for the project as shown on Exhibits 2, 2A, 3 and 3A represented an economically practicable alternative to the location of the project on the site as approved by the Department in the Notice of Intent to Issue dated November 17, 1992. Mudano reiterated his testimony given at the February 24, 1993 hearing that visual access to the proposed facility from US 19 was essential to secure major tenants and major tenants are necessary to assure the economic viability of the project.

    
    

11. Intervenor's two witnesses, both employees of DER at the Tampa District office, reaffirmed their testimony given at the initial hearing that they did not consider the project to be sufficiently minimized. At their initial meetings with Petitioner, which occurred before the Notice of Denial was issued, it was suggested that Petitioner move the project further to the east to reduce the wetlands impact but Petitioner rejected this suggestion as Petitioner did not consider it to be a viable option.

    
    

12. The project was originally planned with a single tenant. Before the Notice of Denial was entered, Annette Baggett developed a transparency with the footprint of the project on the transparency and moved the transparency over a plat of the property to locate a site which, if utilized, would cause less destruction of wetlands. This was not presented to VQH although the concept was discussed.

    
    

13. Following the Order of Remand the Department's Tampa office prepared Exhibits 2A and 3A which were admitted into evidence at this hearing on remand.

    
    

14. Neither the Department nor Intervenor presented any evidence on the economic viability of the project if the footprint of the development is moved further to the east so as to reduce the impact of the project on wetlands. To present such expert opinion testimony was the primary purpose for which the Order of Remand was entered.

    
    

15. Respondent's witness testified that moving the footprint of the project eastward using Exhibit 2A would reduce the impacted wetlands from 8.9 to

    5.28 acres and would be a practicable alternative in providing the same footprint and fronting on a roadway.

    
    

16. Respondent's witness presented a second proposed minimization of the project in Exhibit 3A which would divide the development area into two parcels connected by a filled roadway. This would reduce the wetland impact of the project from 8.9 acres to 2.42 acres if graded in to a 3.1 slope and 1.2 acres of fill if retaining walls were used. This witness opined that these modifications to the project would be "practicable" and that VQH has not demonstrated that these proposed modifications are not practicable. Neither this witness nor the witness called by M-88 presented evidence that either of the proposed modifications would allow the project to be economically viable.

    
    

17. With respect to the "split" project and to demonstrate the "practicability" of this proposal, photographs of Oakbrook Plaza (Exhibit 6A and 6B) showing a footbridge in the foreground (with no pedestrians) and an Oakbrook

    Plaza sign and large building in the background were admitted into evidence. Petitioner's expert witness testified without contradiction that the Oakbrook Plaza had no major tenants and a low occupancy rate while shopping centers on the other three corners of this intersection have high occupancy rates.

    According to this witness Oakbrook Plaza is an economic disaster.

    
    

18. VQH's witnesses reiterated the earlier testimony that moving the project further to the east and further away from US 19 would make the project impracticable from an economic point of view and that the split project from which the proposal depicted on Exhibit 3A was patterned was not an economically successful development and was in serious danger of failing.

    
    

    CONCLUSIONS OF LAW

    
    

19. The Division of Administrative Hearings has jurisdiction over the parties to, and the subject matter of, these proceedings.

    
    

20. VQH has provided reasonable assurances that there is a substantial likelihood that it can comply with the conditions in the Draft Permit.

    
    

21. The Draft Permit provides that VQH will submit a corporate guarantee by the Republic Bank, of which VQH is a wholly owned subsidiary, to guarantee the completion of the mitigation project even if the property is sold to a third party before the mitigation plan is completed.

    
    

22. Location of the project in the southwest portion of the 95 acre tract is the only location on which evidence of economic viability was presented. Respondent and M-88 presented no evidence on the economic viability of the project if the project is moved to the east to place the footprint of the property on more upland and less wetland areas. This evidence goes to minimization of the impact the development will have on the wetlands and not to the "practicability" of this relocation on the economical viability of the project. The matter was not remanded to take additional evidence on the minimization of the project. This remand was to allow the Department and M-88 to present evidence on the economic practicability of moving the project eastward so as to reduce the amount of wetlands affected by the development. That evidence was not presented.

RECOMMENDATION

It is recommended that permit (File No. 511731859) be issued to VQH Development, Inc., in accordance with, and subject to, the conditions contained in the Draft Permit attached to the Notice of Intent to Issue Permit.

DONE AND ENTERED this 30th day of June, 1993, in Tallahassee, Florida.

K. N. AYERS Hearing Officer

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-1550

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 30th day of June, 1993.

APPENDIX

Proposed findings submitted by VQH are generally accepted except as noted below. Those proposed findings neither included in the Hearing Officer's finding of fact nor included below were deemed unnecessary to the conclusions reached.

Finding 7. Although DER and M-88 were allowed to present evidence on minimization, the use of such evidence is limited to the issues for which this case was remanded, i.e. practicability of the proposed modifications, with emphasis on the economic viability of those proposed modifications. Contrary to M-88's contention, the burden is not on VQH to prove these proposed modifications are not practicable but upon DER and M-88 to present evidence that the proposed modifications present a viable alternative to the site for which the Notice of Intent to Issue was applicable.

9-10. Included in Hearing Officer's No. 1.

Findings 11-19. Although not included in Hearing Officer's findings because this was not a real issue at the remand hearing these proposed findings are specifically adopted as reflected in paragraph 19 under Hearing Officer's Conclusions of Law.

25-27. At the May 6, 1992 meeting additional modification proposed on May

6 and included in Exhibit 9 dated May 8, 1992 were deemed by DER to represent adequate minimization and was subsequently approved. However, when Exhibit 9 was received by the Department the reduction in wetlands impact was less than anticipated by the Department and the meeting of June 11, 1992 with Secretary Browner was scheduled.

37. Although DER apparently changed its position between the date of the Order of Remand and this hearing with respect to the minimization of this project, this issue was not remanded for further proceedings and had it been so remanded, I do not know that I would have accepted the remand. This is an issue that was presented by M-88 at the February 24-25, 1992 hearing and was adjudicated at that proceeding with DER a full party participant. One might say that became the "law of the case".

39. Accepted as fact. However, subsections a-h are irrelevant to the issues on remand. At the remand hearing no evidence was submitted relative to reducing the footprint of the project; the only evidence admitted in this regard was moving the footprint to the east to reduce the wetland area affected by the project.

42. Although DER and M-88 were given wide latitude in presenting evidence on the "practicability" of the proposed modifications, it is noted in Finding #7 above the only relevant evidence was that related to the economic viability of the proposed modifications.

49-50. Second sentence accepted as unrebutted testimony of VQH's witness but not as fact.

Proposed findings submitted by DER are accepted except as noted below.

Those neither noted below nor included in Hearing Officer's findings are deemed unnecessary to the conclusions reached.

1-22. Accepted as fact. However, none of these proposed findings are relevant to the issues on remand.

23-24; 26. Rejected. While a primary purpose of visual access from US 19 is to allow vehicular traffic on US 19 to see the shopping center this is not limited to "impulse notion customers."

25. Rejected. The impulse customer could be one fully aware of the presence of the shopping center but reminded of the need for a grocery item by seeing the store.

27-40. Accepted as unrebutted testimony but not relevant to the issues on remand.

41-42. No evidence was presented on "highest and best use", only that the proposed location of the proposed shopping center was an economically viable location.

1. Rejected. No evidence was presented that the proposed modification noted in proposed findings 49-59 constituted an economically viable alternative to the project as contained in the Notice of Intent to Issue Permit.

   
   

2. Rejected. This remand was for the purpose of allowing the Department and M-88 to present expert testimony that the modification proposed by the Department represented viable options for this shopping center. VQH presented unrebutted evidence that this modification proposed (for the first time at this hearing on remand) is not an economically viable alternative to the project as approved in the Notice of Intent to Issue.

1. Rejected. No evidence was presented that the split-concept modification as referred to in proposed findings 62-74 constitute an economically viable alternative to the project as proposed in the Notice of Intent to Issue.

   
   

2. Rejected. This remand was for the purpose of allowing the Department and M-88 to present expert testimony that the modifications proposed by the Department represented viable options for the shopping center. VQH presented unrebutted evidence that this modification proposed (for the first time at this hearing on remand) is not an economically viable alternative to the project as approved in the Notice of Intent to Issue.

77-80. Irrelevant to these proceedings. 82-83. Irrelevant to these proceedings.

Proposed findings submitted by M-88 are accepted except as noted below. Those proposed findings neither included in the Hearing Officer's findings of fact nor included below were deemed unnecessary to the conclusions reached.

I. A. Accepted.

I. B.1.-7. Rejected as irrelevant to the issues on remand.

1. C. Rejected. These are Conclusions of Law-not facts.

   
   

2. A.1.(1) Rejected. (2) and (3) Accepted. These proceedings were remanded to allow DER and M-88 to present "rebuttal expert testimony or other evidence on the issue of the practicability of the modifications suggested by the Department."

II. A.2-6. Rejected. The principal purpose of this remand was to allow M-88 and DER to present rebuttal evidence to the testimony presented at the February hearing by Richard Benware. No witnesses on the issue of practicability not called at the February hearing by VQH were listed by VQH to be called at the remand hearing and no other such witnesses were called. Further, no witness called by M-88 at this remand hearing testified to the economic liability of the modifications suggested by the Department.

II. B.8-10. Rejected. These are legal conclusions, not facts.

II. C.11-13. Rejected. These are legal conclusions, not facts.

II. C.14. Accepted as a true extract from the Order of Remand.

II. C.15. Rejected. This is a misrepresentation of the definition of "practicable" contained in the Order of Remand.

II. C.16. Rejected as a misrepresentation of the Order of Remand.

II. C.17-20. Rejected as fact. These are legal conclusions.

II. C.21. Rejected. Minimization per se is not an issue on remand. The issue on remand is the practicability of modifications proposed by the Department. The issue on remand is not whether the footprint of the proposed development could be located to further minimize the impact on the wetlands but whether such minimization was economically practicable. Neither DER nor M-88 presented any evidence on this issue.

II. C.22. Rejected as irrelevant in view of the fact that neither DER nor M-88 presented any evidence on the economics of the modifications proposed at the hearing on remand.

II. C.23. Rejected as fact. This is a legal conclusion. Rule 312.060(10) F.A.C. was quoted in the initial recommended order and the rule speaks for itself. The rule does not contain the phrase "practicable alternatives."

II. C.24. Rejected. VQH's witnesses were subjected to extensive cross- examination on why VQH could not accept DER's proposed modification as a "practicable" alternative to the site selected.

II. D.1.25-29. Rejected as irrelevant to the issue for consideration

II. D.30. Rejected. Contrary to the testimony presented by VQH on remand.

which was essentially adopted by the Department.

II. E.36-39. Rejected as irrelevant. Evidence of economic viability at the hearing on remand was limited to the practicability of the modifications proposed by the Department. Neither DER nor M-88 presented any evidence to show the proposed modifications were practicable for use as a shopping center.

II. F.1.40. Rejected. These proposed findings were considered in the initial Recommended Order and Order on Remand. This is not an issue on remand.

II. F.1.41. Rejected. At this remand the burden was on DER and M-88 to present evidence on the economic viability of the modification proposed by the Department.

II. F.1.42. Rejected. Mudano also testified at the remand proceedings.

II. F.1.43-45. Rejected as irrelevant.

II. F.2.46-52. Accepted.

II. F.2.53. Accepted. Furthermore this testimony was unrebutted.

II. F.2.54. Rejected. When DER proposed to move the footprint of the property eastward and further from US 19 the need for visual access to US 19 became an issue.

II. F.2.55-58. Rejected.

II. F.2.59. Accepted that alternative on Exhibit 2A would have a lesser impact on wetlands than the project under review.

II. F.3.60-63. Accepted.

II. F.4.64-68. Rejected.

II. F.4.69-73. Rejected as irrelevant.

II. F.4.74. Accepted.

II. F.4.75-77. Rejected as unsupported by the evidence.

II. F1.78-79. Motion denied.

II. F2.80-89. Rejected. These are legal arguments, not facts.

COPIES FURNISHED:

John W. Wilcox, Esquire

Suite 1500, 100 South Ashley Avenue

Tampa, Florida 33602-3511

E. Gary Early, Esquire Post Office Box 10555

Tallahassee, Florida 32302-2555

W. Douglas Beason, Esquire 2600 Blair Stone Road

Tallahassee, Florida 32399-2410

Thomas W. Reese, Esquire

123 Eighth Street North

St. Petersburg, Florida 33701

Virginia B. Wetherell, Secretary Department of Environmental

Regulation

2600 Blair Stone Road Tallahassee, FL 32399-2400

Ken Plante, General Counsel Department of Environmental

Regulation

2600 Blair Stone Road Tallahassee, FL 32399-2400

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions to this Recommended Order. All agencies allow each party at least 10 days in which to submit written exceptions. Some agencies allow a larger period within which to submit written exceptions. You should contact the agency that will issue the final order in this case concerning agency rules on the deadline for filing exceptions to this Recommended Order. Any exceptions to this Recommended Order should be filed with the agency that will issue the final order in this case.

=================================================================

AGENCY FINAL ORDER ON REMAND

=================================================================

STATE OF FLORIDA

DEPARTMENT OF ENVIRONMENTAL PROTECTIONS

VQH DEVELOPMENT, INC., )

)

Petitioner, )

)

vs. ) OGC CASE NO. 92-2243

) DOAH CASE NO. 92-7456 STATE OF FLORIDA DEPARTMENT )

OF ENVIRONMENTAL PROTECTION, )

)

Respondent. )

and )

)

MANASOTA-88, INC., )

)

Intervenor. )

/

FINAL ORDER ON REMAND

On June 30, 1993, a Hearing Officer for the Division of Administrative Hearings submitted his Recommended Order On Remand to the Department of Environmental Protection "Department" and all other parties to this action. A copy of the Recommended Order on Remand is attached as Exhibit "I."

All parties timely filed exceptions to the Recommended Order On Remand.

The applicant, VQH Development, Inc. ("VQH") and the Department timely filed responses to the exceptions of Manasota 88 Inc. ("M-88"). VQH also timely filed a response to the Department's exceptions. In addition, VQH filed a motion for oral argument. The matter thereupon came before me for final agency action.

1. BACKGROUND

   
   

   This case involves an application for a dredge and fill permit to fill eleven acres of a mature high quality red maple forested wetland for the development of a shopping center on the east side of U.S. Highway 19 in the City of Holiday, one mile north of the Pasco County border with Pinellas County, Florida. The nature of the project and the site are more fully described in my Order of Remand entered on May 10, 1993, a copy of which is attached as Exhibit "II."

   
   

   The Hearing Officer had previously issued a Recommended Order in this case recommending that the permit should be granted. 1/ In response to the Recommended Order and exceptions, I remanded the case to the Hearing Officer for further proceedings as appropriate to:

   1. conduct "such further evidentiary proceedings as are appropriate to give M-88 and the Department an opportunity to provide rebuttal expert testimony or other evidence on the issue of practicability of the modifications suggested by the Department" (Order of Remand at 17);

      
      

   2. clarify the conflict between the Hearing Officer's acceptance of M-88's Proposed Finding of Fact No. 131 and his acceptance of VQH's Proposed Findings of Fact No. 64 and Nos. 43-59 (Order of Remand at 17); and

      
      

   3. "reweigh the evidence in the light that a corporate guarantee rather than a performance bond is being offered as financial assurance." (Order of Remand at 33)

   
   

   A hearing on the issues on remand was held on June 9, 1993, whereupon the Hearing Officer issued the above noted Recommended Order On Remand recommending that the permit should be issued.

   
   

2. RULING ON VQH'S MOTION FOR ORAL ARGUMENT

   
   

   VQH has requested oral argument before the Secretary of the Department. In its motion for oral argument, VQH alleges that oral argument is necessary to cure what it claims was an improper ex parte communication between me and members of my staff concerning this case.

   
   

   As to the alleged ex parte contact, VQH correctly notes that on May 28, 1993, I met with Janet Llewellyn, Constance Bersok, Ann Redmond, Doug Beason and Dan Thompson of my staff regarding the issue of whether VQH had modified the project to the extent practicable so as to avoid wetland impacts. The purpose of this meeting was to further inform me regarding the issues on remand and to assist in the formulation of the Department's position in the pending de novo administrative hearing on the issues on remand. VQH contends that this meeting was an improper ex parte communication. I disagree.

   
   

   As to the limited issues on remand pursuant to my Order of Remand of May 10, 1993, the status of the administrative proceedings on those issues was that of a pending de novo administration hearing to be held on June 9, 1993. I may properly confer with my staff prior to an administrative proceeding concerning issues to be resolved by that proceeding. The ex parte rule only precludes me from contact with parties after an administrative hearing and before the entry of the final order. In this case the subject of the meeting was limited to the issues on remand which had not yet been heard by the Hearing Officer.

   Therefore, the communication did not violate the ex parte rule.

   
   

   All parties to this case have had an opportunity to file written pleadings. VQH has filed nine pages of exceptions and 24 pages of responses to exceptions. M-88 has filed 30 pages of exceptions. The Department has filed 21 pages of exceptions and three pages of responses to exceptions. I have reviewed these exceptions and the responses to them and it does not appear that oral argument is necessary to clarify the factual or legal issues in this case.

   
   

   Rule 17-103.200(3), Fla. Admin. Code, provides that I have discretion in deciding whether to grant or deny oral argument. There being no need for further argument on the facts or law, and there being no improper ex parte communication, I will deny the motion for oral argument.

3. PRELIMINARY COMMENT

   
   

   Since many of the exceptions filed reflect an apparent misunderstanding of the scope of issues on remand, it is necessary to clarify the matter. As I noted in the background comments above, this case was remanded for three reasons. The Hearing Officer's resolution of point (3) noted above has not been excepted to by any party. (Recommended Order On Remand at 5, 6) Therefore, the only areas of continuing dispute concern points (1) and (2) on remand, which are the question of practicability of the modifications to the project proposed by the Department, and the question of whether reasonable assurance has been provided that the mitigation will be successful.

   
   

   The sole purpose of point (1) of the remand was to allow M-88 and the Department an opportunity to present evidence to rebut VQH's testimony and the Hearing Officer's finding at the first hearing that certain modifications proposed by the Department were not practicable because the project, as modified, would not be "economically viable." (Order of Remand at 13 to 17; Recommended Order at 7) In my Order of Remand I stated:

   
   

   I conclude that the term practicable must have some economic attribute. A proposed modification which would remove all economic value of the project would be neither reasonable nor practicable.

   Whether a particular modification is practicable will be a mixed question of fact and law which ultimately must be decided by the Department on a case by case basis.

   
   

   Order of Remand at 16. In a footnote to this comment I further noted that:

   
   

   I do not agree with VQH's contention that in order for a modification to be practicable it must allow the applicant the highest and best use of the site. A property owner is not even entitled to the highest and best use in a takings case. Graham v. Estuary Properties, Inc., 399 So.2d 1374 (Fla.

   1981), cert. den.a 454 U.S. 1083 (1981).

   
   

   Nor do I hold that economic viability is the sole factor to consider in determining that a proposed modification would render a project not practicable. Furthermore, a property owner is not entitled to a permit merely because further modification to reduce wetlands impacts would render a project not practicable. The applicant must still provide reasonable assurance that water quality standards will not be violated and that the project meets the public interest test of Sections 403.918(2) and 403.919, Florida Statutes.

   
   

   Therefore, I concluded that the Hearing Officer was correct in concluding that evidence of economic viability was relevant to the issue of practicability. Because VQH's expert testimony on economic viability was not pre-filed as required by a pre-hearing order, I also concluded that a remand was required to allow M-88 and the Department an opportunity to rebut VQH's testimony as to economic viability. Thus, I stated in the Order of Remand that:

   I conclude that testimony as to the economic viability of a project if modified as suggested by the Department is relevant to the issue of whether the proposed modification is "practicable" within the meaning of Rule 17-312.060(10), Fla. Admin.

   Code.

   
   

   Accordingly, I conclude that this proceeding must be remanded for such further evidentiary proceedings as are appropriate to give M-88 and the Department an opportunity to provide rebuttal expert testimony or other evidence on the issue of the practicability of the modifications suggested by the Department.

   
   

   Order of Remand at 17.

   
   

   When the last sentence quoted above is read in the entire context of pages

   13 through 17 of the Order of Remand it is clear that the scope of remand on this issue was limited to evidence going to the economic viability of modifications which had been proposed by the Department in the context of the first hearing. I was not opening the door to newly proposed modifications or to evidence going to any other aspect of practicability.

   
   

   Nor was I opening the door to evidence of land use regulations. The fact that economic viability is relevant to practicability of proposed modifications, and therefore within the authority of the Department to consider as noted in the Order of Remand, does not mean that the Department is authorized to consider land use regulations as a basis for denying a permit. As I noted in the Order of Remand, the Department is precluded from denying permits on such grounds.

   Council of Lower Keys v. Charley Toppino & Sons, Inc., 429 So.2d 67 (Fla. 3d DCA 1983).

   
   

   Finally, the fact that economic viability is relevant to the determination of practicability does not mean that the applicant's reasonable investment backed expectation of a particular use of the land is relevant to economic viability or practicability within the meaning of Rule 17-312.060(10), Fla.

   Admin. Code. Whether a developer could reasonably expect to build a shopping center on a tract of land is not relevant to whether a particular proposed modification of the design of the shopping center would make it no longer economically viable. 2/

   
   

   At the hearing on remand VQH introduced competent substantial evidence that the modifications proposed by the Department were not "economically practicable" and not "economically viable." (Test. of Benware, Tr. at 149-50, 160, 165; Test. of Mudano, Tr. at 195, 199-200) The Department and M-88 countered with competent substantial evidence that modifications to the project would reduce wetlands impacts. The Department and M-88 presented testimony that the modifications were "practicable," and also presented photographic evidence of an existing shopping center having no "visual access." (Exhibits 6A and 6B - photographs of Oakbrooke Plaza). VQH countered with testimony that Oakbrooke Plaza had no major tenants and a low occupancy rate while shopping centers on the other three corners of the intersection had high occupancy rates.

   (Testimony of Mudano, Tr. at 201-2) VQH's expert opined that Oakbrooke Plaza was an economic disaster. (Testimony of Mudano, Tr. at 202)

   Given this factual background it is undeniable that the Hearing Officer's finding that the proposed modifications were not economically viable and therefore not practicable is supported in the record by competent substantial evidence. I am not at liberty to reject such findings or to reweigh the evidence. Heifetz v. Dept. of Business Regulation, 475 So.2d 1277, 1281 (Fla. 1st DCA 1985).

   
   

   The Hearing Officer resolved issue (2) on remand by rejecting M-88's Proposed Finding of Fact No. 131 as contrary to the weight of competent substantial evidence that reasonable assurances that the mitigation would be successful had been provided.

   
   

   In sum, VQH convinced the Hearing Officer that the preponderance of the competent substantial evidence shows that the proposed modifications were not practicable, and that reasonable assurance had been provided that when the proposed mitigation and cumulative and secondary impacts are taken into consideration, the project will not cause violations of water quality standards and will not be contrary to the public interest.

   
   

4. RULINGS ON MANASOTA-88'S EXCEPTIONS

   
   

   1. M-88 Exception No. I

      
      

      M-88 contends that the Hearing Officer erred in holding that M-88's Proposed Findings of Fact Nos. 9-13, 15, 18-19, 21, 23, 67-68, 84-85, 87-88,

      100, 104-106, 109, 112-114, and 116 accepted in the first hearing were not relevant to the issues on remand. I conclude that, with the arguable exception of Proposed Findings of Fact Nos. 105 and 106, none of these proposed findings of fact are relevant to the issue of the economic viability of the modifications proposed by the Department. Therefore, such proposed findings are not relevant to this issue on remand. 3/ In the first hearing the Hearing Officer rejected the word "practicable" in Proposed Finding of Fact No. 105. As accepted, it is not relevant to this issue on remand. Nor is Proposed Finding of Fact No. 106 really relevant on remand. It stated that no evidence in the first hearing was provided that visual access was necessary for economic viability. Since such evidence was presented on remand in any event, the proposed finding is irrelevant. (Test. of Benware, Tr. at 160; Test. of Mudano, Tr. at 195, 200)

      
      

      Many of M-88's proposed findings of fact relate to land use issues. As I noted above, the fact that economic viability is relevant to practicability of proposed modifications, and therefore within the authority of the Department to consider as noted in the Order of Remand at 13-17, does not mean that the Department is authorized to consider land use regulations as a basis for denying a permit. As I noted in the Order of Remand, the Department is precluded from denying permits on such grounds. Council of Lower Keys v. Charley Toppino & Sons, Inc., 429 So.2d 67 (Fla. 3d DCA 1983).

      
      

      Nor are the proposed findings of fact on the issue of VQH's reasonable investment backed expectation of use of the land relevant to economic viability or practicability within the meaning of Rule 17-312.060(10), Fla. Admin. Code.

      
      

      Accordingly, I conclude that the Hearing Officer did not err in rejecting the above noted proposed findings of fact as irrelevant. Exception I is therefore rejected.

      
      

   2. M-88 Exception No. II

      This exception misconstrues the scope of remand and is rejected for the reasons stated in Part III above.

      
      

   3. M-88 Exception No. III

      
      

      M-88 contends that the Recommended Order On Remand errs in considering economic viability as a factor in determining practicability of modifications proposed by the Department. This exception is beyond the scope of remand and attempts to reargue a conclusion of law in the Order of Remand. The exception is rejected for the reasons stated in Part III above.

      
      

   4. M-88 Exceptions Nos. IV and V

      
      

      In Exception IV M-88 again challenges the Order of Remand's conclusion of law that economic viability is relevant to the issue of practicability. M-88 also contends that if economic viability is relevant to practicability then a project as modified need not be profitable to be practicable. I reject these contentions for the same reasons stated in Part III above.

      
      

      In Exceptions IV and V M-88 contends that the Order of Remand and the Hearing Officer erred in considering economic viability. M-88 also contends that the Department should consider investment backed expectations of land uses and find an alternative to be not practicable only if it amounts to a regulatory taking, i.e., a denial of all beneficial use. I reject this contention as not being supported in the law.

      
      

      As I noted in my Order of Remand at pp. 13-17, the statutory authorization for finding that economic viability is relevant to practicability within the meaning of Rule 17-312.060(10) flows from Section 403.918(2), Florida Statutes, which provides in part:

      
      

      If the applicant is unable to otherwise meet the criteria set forth in this section [i.e., the department, in deciding to grant or deny a permit, shall consider measures proposed by or acceptable to the applicant to mitigate adverse effects which may be caused by the project. (emphasis added)

      
      

      I do not agree that this statute authorizes the Department to require a modification which would change the entire nature of the project from the proposed use to any use short of a regulatory taking. Such an interpretation goes too far and would endow the Department with de facto land use regulation authority.

      
      

      In Exception IV M-88 also contends that the Hearing Officer erred in precluding M-88's cross-examination of VQH's "practicability" witnesses on the issue of the standard they were using to measure practicability. VQH's experts testified that they would consider (1) income stream less costs, (2) marketplace acceptance, (3) market demand, (4) ability to attract strong anchor tenants, (5) "visual access," i.e., visibility form the main roads, (6) ease of traffic flow, and (7) economic return. (Test. of Benware, Tr. at 149-50, 160, 165; Test. of Mudano, Tr. at 195, 199-200) I conclude that the testimony of VQH's experts amply set forth the economic criteria they used in determining their opinions on the practicability of the proposed modifications. Therefore, I find no error in the Hearing Officer's evidentiary ruling.

      
      

      For each of the reasons stated above, I reject Exceptions IV and V.

   5. M-88 Exception No. VI

      
      

      M-88 takes exception to the Hearing Officer's rejection of M-88's Proposed Findings of Fact Nos. 34 and 35. These findings assert that it is the law of the case that the proposed project is not wetland or water dependent and does not benefit essential economic development. The Hearing Officer correctly rejected these proposed findings as not relevant to the issues on remand. M-88 incorrectly implies that these proposed findings are factors to be considered in determining whether a proposed modification is practicable. Although Rule 17- 312.015(1)(d) provides that it is the policy of the state to consider such factors, the same rule expressly provides that such factors "shall not apply . as permitting criteria." See also Saltiel v. Nash and Department of Environmental Regulation, 14 FALR 4894, 4904 (DER Case No. OGC 91-2065, Oct. 12, 1992)(such factors are not permitting criteria). Therefore, I conclude that the Hearing Officer did not err in concluding that such proposed findings were not relevant to the issues on remand. Accordingly, the exception is rejected.

      
      

   6. M-88 Exception No. VII

      
      

      This exception raises the same issue that was disposed of in the Order of Remand in Part 111(4) at page 18. The exception is beyond the scope of remand and is rejected.

      
      

   7. M-88 Exception No. VIII

      
      

      M-88 excepts to the Hearing Officer's rejection of M-88's proposed findings of fact related to a "stand alone" store modification. The Hearing Officer rejected the proposed findings as beyond the scope of remand. I agree that the proposed findings are beyond the scope of remand for the reasons stated in Part III above.

      
      

   8. M-88 Exception No. IX

      
      

      M-88 claims the Hearing Officer erred when he rejected M-88's Proposed Findings of Fact Nos. 54-59. These proposed findings of fact assert that visual access is not necessary for a modification to be practicable. In essence, M-88 is asking me to reweigh the evidence and overturn the Hearing Officer's finding that the proposed modifications are not practicable. I am not at liberty to do so because, as noted in Part III above, the Hearing Officer's findings are supported in the record by competent substantial evidence. Heifetz, sura.

      Therefore I reject this exception.

      
      

   9. M-88 Exception No. X

      
      

      M-88 contends the Hearing Officer erred in rejecting M-88's Proposed Finding of Fact Nos. 64-68. These proposed findings go to (1) the relevancy of economic viability to practicability, (2) the relevancy of reasonable investment backed expectations for use of the land, and (3) the relevancy of water dependency and promotion of essential economic development. The exception is rejected for the reasons stated in Parts III, IV(1), and IV(5).

      
      

   10. M-88 Exception No. XI

       
       

       M-88 contends that the Hearing Officer erred in rejecting M-88's Proposed Findings of Fact Nos. 69-73 as irrelevant. These proposed findings of fact would be relevant only of a proposed modification would have to remove all

       economic value to be not practicable. Since a showing that a modification is not practicable does not require a showing that the modification would remove all economic value (see Parts III and IV(4) above), I conclude that the Hearing Officer did not err in rejecting these proposed findings. I therefore reject this exception.

       
       

   11. M-88 Exception No. XII

       
       

       M-88 contends the Hearing Officer erred in rejecting M-88's Proposed Findings of Fact Nos. 75-77 as unsupported by the evidence. These proposed findings go to the issue of whether the testimony of VQH's experts on practicability of the proposed modifications erred in their opinions by not reducing the mitigation cost to reflect the reduced mitigation which might be required by a modification which impacted less wetlands.

       
       

       Although Mr. Stetler testified as to a hypothetical case in which mitigation costs would be reduced by a modification (Stetler, Tr. at 90-91), M- 88's proposed findings did not cite any competent substantial evidence in the record to support its contention that a proposed modification would reduce mitigation costs by $320,000. Nor can I find any such competent substantial evidence in the record. Therefore, I conclude that the Hearing Officer did not err in rejecting the proposed findings. Accordingly, this exception is rejected.

       
       

   12. M-88 Exception No. XIII

       
       

       M-88 contends that the Hearing Officer erred in characterizing M-88's Proposed Findings of Fact Nos. 81, and 86-88 as conclusions of law. These proposed findings go to the issue of whether, given the current state of knowledge and failure rate of creation of forested wetlands as mitigation, reasonable assurance has been given that the mitigation will be successful. Given the context in which these proposed "findings" are made, I conclude that the proposed findings are mixed findings of fact and conclusions of law.

       
       

       On remand the Hearing Officer reconsidered the previous conflicting findings on this issue and concluded that reasonable assurance had been provided that the mitigation would be successful. (Recommended Order on Remand at 4-5) I accept the Hearing Officer's conclusion as being supported in the record by competent substantial evidence.

       
       

       In view of the fact that the Hearing Officer clearly reconsidered the evidence on this issue, I conclude that if there was any error in characterizing the above proposed findings as conclusions of law, then the error was harmless. Accordingly, I reject this exception.

       
       

   13. M-88 Exception No. XIV

   
   

   M-88 argues that the Hearing Officer erred in finding that M-88's Proposed Finding of Fact No. 131 (from the first hearing) to be contrary to the weight of the evidence. As I stated in my Order of Remand at 19, proposed Finding No. 131 conflicted with VQH's Proposed Finding of Fact No. 64 which was accepted by the Hearing Officer and which states in part that:

   
   

   based upon the scope and level of detail provided by the applicant and the obvious financial resources to carry out the program of mitigation there is a substantial likelihood that the impacts

   to the 11 acre wetland can be offset and that there may ultimately be a net positive benefit to the state in terms of additional wetland acreage.

   
   

   The Order of Remand also stated that:

   
   

   The Hearing Officer also accepted VQH's Proposed Findings of Fact Nos. 43-59, all of which are supported in the record by competent substantial evidence and would, in the absence of conflicting findings, support the Hearing Officer's finding and conclusion that VQH provided reasonable assurance that the project, when considered with the mitigation offered, is not contrary to the public interest.

   
   

   Order of Remand at 19. As I held in the Order of Remand, the record contains competent substantial evidence to support the Hearing Officer's conclusion that M-88's Proposed Finding No. 131 is contrary to the weight of the evidence.

   Therefore, 1 will not upset that finding. The exception is therefore rejected.

   
   

5. RULINGS ON VQH'S EXCEPTIONS

   
   

   1. VQH Exception No. 1

      
      

      VQH takes exception to Finding of Fact No. 2 in that it states that the amount of the corporate guarantee (or bond, if a bond is requested by the Department) will be $440,000. VQH contends that the testimony and evidence shows that the amount of the guarantee is to be 110 percent of the final cost estimate of the mitigation as provided by Rule 17-312.390(2), Fla. Admin. Code. I accept this exception.

      
      

   2. VQH Exception No. 2

      
      

      VQH takes exception to a scrivener's error in Finding of Fact No. 8 which incorrectly stated May 11, 1992, to be the date on which the Department, prior to the remand, accepted the plan with 8.9 acres of wetlands impact as the minimum wetlands impact necessary. The actual date of the acceptance was June 11, 1992. (Tr. at 56-8, 123-6, 140-2) I accept this exception.

      
      

   3. VQH Exception No. 3

      
      

      VQH takes exception to Finding of Fact No. 12 to the extent that it states that the project was originally planned with a single tenant. VQH requests that this finding be modified to add findings of fact that "the project has existed in its current form since the date of application completeness, but that a similar plan with a single anchor tenant was suggested at some point prior to she entry of the Notice of Intent to Issue the permit on November 17, 1992."

      
      

      Except where it is clear from the record that there is no dispute as to a proposed fact, I may not make Supplemental findings of fact. Manasota-88 V. Tremor, 545 So.2d 439, 441 (Fla. 2d DCA 1989); Friends of Children V. Dept. of Health and Rehabilitative Services, 504 So.2d 1345 (Fla. 1st DCA 1987). The facts which VQH asks me to add are too close to the dispute in this case. VQH characterizes its concern as one of semantics and has not asked for a further remand, and I conclude that a further remand for this purpose is not appropriate. Therefore, I reject this exception.

   4. VQH Exceptions No. 4 and 5

      
      

      VQH Exceptions Nos. 4 and 5 take exception to the Hearing Officer's acceptance of M-88's Proposed Findings of Fact Nos. 53 and 63. which state:

      
      

      53. The only evidence presented by VQH as to why the Exhibit 2A alternative was not practicable was the testimony of Mr. Benware and Mr. Madano [sic] that visual access to Highway 19 was necessary and the alternative put the proposed Publix grocery store further from Highway 19 than Publix desires.

      63. The only evidence presented by VQH as to why Exhibit 3A alternative was not practicable dealt with visual access to Highway 19 and the economics of split shopping centers.

      
      

      VQH points out that the record contains competent substantial evidence that frontage on Highway 19 and vehicular access to Highway 19 were necessary for a shopping center project to be practicable. (Test. of Benware, Tr. at 168; Test. of Mudano, Tr. at 199, 205, 210, 212)

      
      

      The reference to certain evidence as being the "only" evidence as to practicability in M-88's Proposed Findings of Fact Nos. 53 and 63 clearly conflicts with the record and, therefore, is not supported in the record by competent substantial evidence. Therefore, I accept these exceptions and reject the Hearing Officer's acceptance of M-88's Proposed Findings of Fact Nos. 53 and 63.

      
      

   5. VQH Exception No. 6

   
   

   VQH excepts to the Hearing Officer's acceptance of M-88's Proposed Finding of Fact No. 74 to the extent that the finding implies that the Department proposed, as a practicable alternative, a "stand alone retail store." Once again, VQH concedes the exception may be more semantics than substance. The exception is therefore rejected.

   
   

6. RULINGS ON DEPARTMENT'S EXCEPTIONS

   
   

   1. DEP Exception No. 1

      
      

      The Department takes exception to the Hearing Officer's characterization of its Proposed Findings of Fact Nos. 1, 4, 5, 10-17, and 21-22 as irrelevant.

      These proposed findings go to reasonable investment backed expectations for use of the property. The exception misconstrues the scope of remand and the relevancy of economic viability to the issue of whether a proposed modification is practicable. The exception is rejected for the reasons stated in Parts III, IV(1), IV(2) and IV(4).

      
      

   2. DEP Exception No. 2

      
      

      The Department takes exception to the Hearing Officer's rejection of the Department's Proposed Findings of Fact Nos. 60-61, and his ultimate legal conclusion that the Department failed to establish that its proposed modifications were practicable. This exception is essentially asking me to reweigh the evidence. I may not lawfully do so. Heifetz, sura.

      This exception also asserts that the Hearing Officer erred in requiring proof of economic viability rather than proof of practicability. I disagree. While proof of practicability is the ultimate legal standard, economic viability is relevant to practicability and was the only remaining element to be resolved on remand.

      
      

      This exception also asserts that the Hearing Officer erred in characterizing as irrelevant the Department's Proposed Findings of Fact Nos. 43- 59, and in rejecting Proposed Findings of Fact Nos. 60-61. I agree with the Hearing Officer that Proposed Findings of Fact Nos. 43-55 were not relevant to the issue of the economic viability of the modifications proposed in the first hearing and therefore were beyond the scope of remand.

      
      

      However, I do not agree that Proposed Findings Nos. 56-59 are irrelevant to the issue of economic viability of the proposed modifications. These findings go to the issues of no decrease in lease space, vehicular access, and visual access. They are relevant to the economic viability of the proposed modifications. Therefore, I accept this exception as to Proposed Findings Nos. 56-59, and reject it otherwise.

      
      

   3. DEP Exception No. 3

   
   

   This exception asserts that the Hearing Officer erred in rejecting the Department's Proposed Findings of Fact Nos. 41 and 42. These findings are directed to the highest and best use of the land. As stated herein and in the Order of Remand, the highest and best use of the land is not relevant to the practicability of a proposed modification. Therefore, the Hearing Officer did not err. The exception is rejected.

   
   

7. CONCLUSION

VQH has proved by the preponderance of the evidence that the modifications proposed by the Department to further minimize wetlands impacts were not practicable, and has provided reasonable assurance that, in view of the proposed mitigation, the project will not violate water quality standards and is not contrary to the public interest. Accordingly, the permit should be issued.

ACCORDINGLY IT IS ORDERED THAT:

1. VQH's motion for oral argument is DENIED.

   
   

2. Except as is otherwise stated in this Final Order on Remand, the Hearing Officer's Recommended Order On Remand is adopted and incorporated herein by reference.

   
   

3. VQH's Permit Application No. 511731859 shall be issued forthwith.

NOTICE OF RIGHTS

Any party to this Final Order has the right to seek

judicial review of this Order pursuant to Section 120.68, Florida Statutes, by the filing of a Notice of Appeal pursuant to Rule 9.110, Florida Rules of Appellate Procedure, with the Clerk of the Department in the Office of General Counsel, 2600 Blair Stone Road, Tallahassee, Florida 32399-2400; and by filing a copy of the Notice of Appeal accompanied by the applicable filing fees with the appropriate District Court of Appeal. The Notice of Appeal must be filed within

30 days from the date this Order is filed with the clerk of the Department.

DONE AND ORDERED this 13th day of August, 1993, in Tallahassee, Florida.

STATE OF FLORIDA DEPARTMENT OF ENVIRONMENTAL PROTECTION

VIRGINIA B. WETHERELL

Secretary

Twin Towers Office Building 2600 Blair Stone Road

Tallahassee, Florida 32399-2400

ENDNOTES

1/ The Recommended Order is included as an exhibit to the Order of Remand.

2/ I also reject M-88's suggestion that a proposed modification to a commercial project could be practicable even if the project, as modified, could not be profitable. I reject this view for the same reason stated in my Order of Remand. "A proposed modification which would remove all economic value of the project would be neither reasonable nor practicable." (Order or Remand at 16)

3/ Nor are they relevant to the other issues on remand.

CERTIFICATE OF SERVICE

I hereby certify that a true and correct copy of the foregoing has been furnished to the following persons on this 13th day of August, 1993:

BY HAND DELIVERY TO:

The Honorable K.N. Ayers Hearing Officer

Division of Administrative Hearings DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-1550

Clerk, Division of Administrative Hearings DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-1550

W. Douglas Beason, Esquire Assistant General Counsel State of Florida Department of Environmental Protection Twin Towers Office Building 2600 Blair Stone Road

Tallahassee, Florida 32399-2400

AND BY U.S. MAIL TO:

Attorneys for Petitioner:

John w. Wilcox, Esquire E. Gary Early, Esquire Akerman, Senterfitt & Eidson Akerman, Senterfitt & Eidson

P.O. Box 3273 P.O. Box 10555

Tallahassee, Florida 33601-3273 Tallahassee, FL 32302-2555 Attorney for Intervenor

Thomas W. Reese, Esquire

123 Eight Street North

St. Petersburg, Florida 33701

STATE OF FLORIDA, DEPARTMENT OF ENVIRONMENTAL PROTECTION

ROBERT G. GOUGH

Assistant General Counsel 2600 Blair Stone Road

Tallahassee, Florida 32399-2400 Florida Bar No. 410489

(904)488-9730

Docket for Case No: 92-007456

Orders for Case No: 92-007456