Villages at Vigneto-Whetstone Ranch

The proposed future home of the 28,000-home Villages at Vigneto, along Arizona 90 south of Interstate 10.

In a sudden reversal, the U.S. Fish and Wildlife Service has backed down from its insistence that federal regulators must consider the environmental impact of a 28,000-home development east of Tucson when consulting about whether to reinstate the project’s permit.

Yet a wildlife service official emphasized the agency still has concerns about what the massive project will do to nearby critical habitats and the San Pedro River, the last major free-flowing river in the Southwest.

“Our concerns remain, but the legal situation required us to retract that position,” said Steve Spangle, the wildlife service’s Arizona field supervisor. “That doesn’t make the concerns go away.”

Critics of the Benson-area project, a master-planned community called Villages at Vigneto, say the reversal is based on an unsupported assertion by the Phoenix developer, El Dorado Holdings Inc.

The wildlife service last year aligned itself with environmentalists when it insisted that federal agencies’ review of the project must consider the environmental effects of Vigneto’s entire 12,300 acres, including the impact of groundwater pumping for its anticipated 70,000 new residents.

But in an October letter, the wildlife service told the U.S. Army Corps of Engineers it now agrees with the Corps that the scope of analysis can be much more narrow, focused just on Vigneto’s effects on desert washes which are under the jurisdiction of the Army Corps. That’s an area covering about 1,800 acres, including an off-site mitigation parcel.

The letter was first reported by Reveal from the Center for Investigative Reporting, in collaboration with High Country News, on Nov. 17.

Because of that narrower scope, the wildlife service said it agrees with the Army Corps’ earlier findings that if Vigneto’s permit is approved, the project is not likely to adversely affect critical habitats and endangered or threatened species in the portion of the project it’s now evaluating.

The wildlife service said the reversal was prompted by a new and controversial assertion from Phoenix-based developer El Dorado Holdings: The developer now says it doesn’t actually need the Clean Water Act permit that prompted the federal agencies’ scrutiny in the first place.

El Dorado spokesman Mike Reinbold did not respond to the Star’s question about why it has been pursuing the permit, which has been holding up the project since the Army Corps suspended it last year, if it wasn’t required for Vigneto to move forward.

“As a practice we generally do not comment on ongoing pending governmental actions,” he said in an email.

Whether or not the permit is necessary is a crucial legal point: If the developer could build the master-planned community without disturbing the washes that weave through the development site, then it doesn’t need a Clean Water Act permit.

If that’s the case, the development’s environmental impact, including its groundwater use, technically can’t be considered a direct outcome of approving the permit, Spangle said. The only impacts directly caused by the permit will be the developer’s filling of 51 acres of desert washes allowed by the permit, and the habitat mitigation activities the permit requires in exchange.

“If they say, ‘We’re gonna build without the permit,’ then we have no reason to not believe them,” Spangle said. “The fact is, the Fish and Wildlife Service does not have expertise on what other development could happen without a permit. Therefore we have to rely on the intent of the developer, as well as the Army Corps of Engineers.”

Vigneto critics have a lot of problems with this line of reasoning. An attorney for environmentalists says it’s concerning that a regulatory agency would defer to a bold assertion from the developer it regulates.

That deference “allows the proverbial fox to guard the henhouse,” said attorney Stu Gillespie of Earthjustice. The law firm represents six environmental groups engaged in a lawsuit against the Army Corps, alleging violations of the Endangered Species Act. The act requires federal agencies to consult about any federal action — in this case, approving the permit — that could affect endangered or threatened species and their habitats.

The wildlife service’s reversal is “exceptional,” Gillespie said in an email. “It effectively renders the (Endangered Species Act) toothless.”

Spangle said the wildlife service still has concerns about Vigneto’s anticipated groundwater pumping from the aquifer feeding the San Pedro River, which could result in reduced river flow, and the effects of a surge in human population near sensitive habitats.

“Those are our main concerns, and those remain. Those are biological facts,” Spangle said. “But from a legal standpoint, we couldn’t consider that in our Endangered Species Act deliberations” with the Army Corps.

Army Corps spokesman Dave Palmer declined to comment, citing the pending litigation.

BENSON CITY COUNCIL

The Benson City Council approved Vigneto’s community master plan in July 2016, and is currently considering the creation of additional special taxing districts to help fund the development.

Councilmember David Lambert said he has a lot of questions for El Dorado about a variety of issues, and the developer has not been forthcoming.

Of the latest issue, he said, “If they don’t need the permit, why are they wasting the time waiting for it? ... I think El Dorado Holdings is actually doing this to basically keep us confused. A confused person would be more apt to just go ahead and vote for something.”

None of the other four council members responded to the Star’s requests for comment. Mayor Toney King also did not respond.

Tricia Gerrodette, an environmental activist, said the wildlife service’s reversal appears to be linked to the Trump administration’s eagerness to weaken environmental regulations that could constrain development.

“They’ve done 180 degrees,” she said. “I don’t think it’s as scientifically driven a change, as a politically driven change.”

El Dorado Holdings’ CEO Mike Ingram contributed $15,500 to Donald Trump’s presidential campaign last year, Federal Election Commission records show. Trump’s EPA administrator Scott Pruitt’s online schedule shows on May 2, Pruitt met with “El Dorado Holdings.”

The developer would not say whether Vigneto was discussed at that meeting, but Reinbold said in an email that Ingram was among 17 attendees at the meeting which was organized through the Greater Phoenix Economic Council.

“NO ACTION ALTERNATIVE”

Nicole Gillett of the Tucson Audubon Society, one of the groups suing the Corps, said federal agencies should not simply trust that El Dorado can build Vigneto without the Clean Water Act permit.

“We should certainly not be making permit decisions based on that assumption,” she said. “If they’re going to completely redo their plan to be no-impact, we’d love to see them try to do that. But as it stands we don’t see that as likely, or possible, given the current scope of the project, which is enormous.”

* I understand and agree that registration on or use of this site constitutes agreement to its user agreement and privacy policy.

By the developer’s own account, the project’s “no-action alternative” — that is, how the development could proceed if the federal agencies did not take any action to approve the Clean Water Act permit — differs from what is described in the plan approved last year by the Benson City Council.

Avoiding the washes would undermine the project’s “core concept of interconnected villages,” wrote El Dorado president Jim Kenny in a September letter to the Army Corps, obtained by the Star through a Freedom of Information Act request.

“Major streets and backbone infrastructure would be oriented west-to-east between the major washes, and would not be interconnected and integrated,” he wrote. “Sewer collection and treatment would be less centralized, and the timing and availability of reclaimed water for non-potable uses and recharge would be affected.” Kenny also said this version of Vigneto would likely add vineyards and nut orchards as an additional source of revenue.

“Admittedly, developing our property in this manner would not meet our project purpose,” he wrote. But if the permit isn’t reinstated, “El Dorado will develop the site in this fashion rather than sitting on its investment and earning no return.”

In an interview, El Dorado spokesman Reinbold would not elaborate on how the vision for Vigneto would change if the developer had to avoid desert washes, nor whether the City Council of Benson would be likely to approve that version of Vigneto.

“Let me ask you a question: What does it matter?” Reinbold said. “You’re getting the cart in front of the horse. Why don’t we have this conversation if the permit is not reinstated?”

Attorney Gillespie says there is a crucial difference: If the no-action alternative will be dramatically different than the project as planned, then it’s not true to claim that the same Vigneto development could happen without the permit, Gillespie said. The letter from El Dorado makes it clear that the no-action alternative would be “markedly” different than the current Vigneto plan, he said.

“If this type of letter is all a developer needs to do under this administration to circumvent (environmental oversight laws), there will be serious impacts to our environment that go unanalyzed and unregulated,” he said.

PUBLIC COMMENTS

The Army Corps is accepting public comments through Dec. 4 on whether to reinstate or revoke Vigneto’s suspended Clean Water Act permit.

The permit allows the developer to fill in 51 acres of washes — considered “Waters of the U.S.,” under the jurisdiction of the Army Corps — to make way for the residential development, in exchange for protecting and restoring the 144-acre offsite mitigation parcel.

The permit was originally awarded to a smaller, canceled housing development and transferred to Vigneto’s developers in 2014. But the permit only covers 8,200 of Vigneto’s 12,300-acre project site, which is another point of contention for Vigneto’s critics.

Vigneto’s developers have said the remaining 4,100 acres can be permitted separately, but environmentalists call that “piecemealing,” a strategy that understates the cumulative effects of development.

Lambert said city councilmembers shouldn’t shy away from asking questions of developer El Dorado to ensure the project is done in a way that truly benefits Benson residents.

“I think the project is a great project,” he said. “But there are ways to do it correctly and ways to do it incorrectly.”

Contact reporter Emily Bregel at ebregel@tucson.com or 573-4233. On Twitter: @EmilyBregel