Serving Northern St. Louis County, Minnesota

More suits filed in land exchange for PolyMet

Marshall Helmberger
Posted 3/29/17

REGIONAL— Environmental groups filed a spree of lawsuits against the federal government’s land exchange with PolyMet Mining this week, including a second one alleging that the U.S. Forest …

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More suits filed in land exchange for PolyMet

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REGIONAL— Environmental groups filed a spree of lawsuits against the federal government’s land exchange with PolyMet Mining this week, including a second one alleging that the U.S. Forest Service’s appraisal of the federal lands at issue was faulty. Other lawsuits focused on alleged violations of federal environmental rules.

First out of the gate was the case filed Monday by the Minnesota Center for Environmental Advocacy, the Center for Biological Diversity, and the W. J. McCabe Chapter of the Izaak Walton League alleging flaws in the federal appraisal.

Among the allegations in the MCEA suit is that the Forest Service specifically instructed Wisconsin-based Compass Land Consultants, the company handling the appraisal, to ignore the fact that PolyMet controls mineral rights below the 6,650 acres of federal land it seeks to acquire and that it intends to open a copper-nickel mine on the site. If so, that would appear to be a violation of the federal appraisal rules, which require that appraisers consider the planned use of the property when determining its value.

Certified appraisers are required to use standard rules and guidelines to complete their work, and that includes establishing a property’s value based on its “highest and best use,” which is typically the use that would generate the highest economic return. In doing so, appraisers are expected to consider the proposed use for a property. That’s a specific requirement under the Uniform Appraisal Standards for Federal Land Acquisitions, which states “a nonfederal party’s proposed use, if reasonably probable, must be analyzed as a part of the highest and best use determination.”

Federal land exchanges are supposed to be made based on value-for-value, rather than simply acre-for-acre, since some acres are worth much more than others. In the case of the PolyMet exchange, the Forest Service weighed the deal as a roughly acre-for-acre exchange of timberland. Yet while the Forest Service obtained actual timberland from PolyMet, attorneys for the environmental organizations argue that the agency is giving up potential mineland, which typically sells for significantly more on the private market.

The latest legal action is similar to the case filed Jan. 30 by Duluth-based Water Legacy, which raised many of the same arguments. That suggests the possibility that the cases could be consolidated.

Environmental groups had been tracking the progress of the land exchange for years and had made requests early on for copies of the appraisal and related information. But the Forest Service had repeatedly denied access to the appraisal, even after federal officials approved the document in November 2015. While the Forest Service provided for public comment on its draft decision to move forward with the exchange, it did not release the appraisal information until months after the objection period had closed. Representatives of MCEA had raised the problems with the appraisal in a letter submitted to the Forest Service in late December 2016. MCEA officials took particular exception to the appraisal’s determination that mining on the site was “not feasible,” a conclusion that the groups contend “defies reason.”

“[i]t is not only feasible for mining to occur on the exchanged lands, it is highly likely,” noted the plaintiffs in their letter to the Forest Service. “PolyMet has invested hundreds of millions of dollars in developing the mine project on the very lands for which the Forest Service’s valuation concludes that mining is not feasible.”

The environmental groups contend that a more accurate valuation of the federal lands that did not ignore their mining value, would have produced a higher value, which could have required PolyMet to put up more acreage of timberland in order to complete a land exchange. “Comparable sales demonstrate that properties sold to facilitate mining are sold for amounts much higher than the $550/acre used by the Forest Service in the present land exchange,” write the plaintiffs in their complaint. “Because the Forest Service relied on an appraisal report that was fundamentally premised on an assumption that is untrue, the NorthMet land exchange is unlawful under the equal value requirements of [federal law].”

PolyMet spokesperson Bruce Richardson reiterated the company’s confidence in the Forest Service’s work. He said “it followed well-established federal guidelines by the U.S.  Department of Justice. After years of review and analysis, the Forest Service has determined the land exchange best serves the public’s interest.”

Environmental claims

Meanwhile, the Center for Biological Diversity, Earthworks, and Save Our Sky Blue Waters filed atheir own suit alleging violations of the Endangered Species Act. “This massive mine would destroy public forest that’s critical to the survival and recovery of wolves and lynx,” said Marc Fink, a Duluth attorney representing the Center for Biological Diversity. “By approving this destructive and dangerous project, the Forest Service violated its own rules against open pit copper mining,” said Fink. “The agency’s attempt to trade away part of our national forest to a foreign corporation poses a major threat to Minnesota’s water and wildlife.”

Save Our Sky Blue Waters was joined by the Sierra Club Northstar Chapter and the Save Lake Superior Association on yet a third lawsuit, alleging that the Forest Service violated the federal Weeks Act and the National Environmental Policy Act, or NEPA.

“By approving the PolyMet land exchange, the Forest Service is forsaking its duty to protect the headwaters of Lake Superior and opting to leave behind a toxic legacy of sulfide mine pollution, with its accompanying health risks for us and future generations,” said Elanne Palcich of Save Our Sky Blue Waters.

This week’s legal filings raise the number of lawsuits filed against the Forest Service land exchange to four. The U.S. Forest Service did not respond to a request seeking comment for this story.

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