Statement of Rudolph Willey, President,
North California Presley Homes, Martinez, California

Before Presley purchased our land in San Jose in 1997, we were aware that the property had once been occupied by the threatened Bay checkerspot butterfly. We contacted the nationally recognized Stanford conservation biologist, Dr. Dennis Murphy (who addressed this subcommittee on July 20 on science and habitat conservation planning), because he was the scientist who petitioned the USFWS to list this butterfly, and no individual is more committed to this species. We were told by Stanford University scientists who studied this species for decades, that the butterfly had abandoned the site in 1990 and that weedy exotic grasses had almost entirely replaced the host plants which the butterfly requires to survive. The butterfly would be unable to re-colonize this site on its own because of this weedy invasion.

Dr. Murphy worked with Presley to develop a plan to conserve nearly two-thirds of the area on-site that was once occupied by the butterfly, eliminate the non-native weeds, restore native plants, and bring butterflies back to the site. (A condition that would never exist again without aggressive habitat management.) These objectives formed the basis of our draft HCP, which took many months and $300,000 to produce. Even though there was no listed animal species on the property, and thus no incidental take permit was required, Presley chose to purse an HCP and Section 10 permit voluntarily because it would be prudent to obtain the "No Surprises" assurances, and because it was the right thing to do. The HCP included extraordinary conservation commitments, with specific biological goals of: .

-- 71 acre permanent butterfly habitat preserve, including 17 acres of host plants

-- 20 major plant conservation areas

-- The first agency sanctioned man-made California tiger salamander pond

-- Substantial avoidance / Translocation of listed plants

The HCP also included an exemplary adaptive management plan with some of the following points:

-- An Environmental Trust to which Presley will deed over 50% of the 575 acres and provide initial funding of $1.6 million.

-- Thereafter, the trust will receive $200,000 a year in perpetuity for professional biological management and monitoring of the preserved lands.

Given the voluntary nature and progressive scope of the HCP, Presley expected the plan to be embraced by the Service. Instead, the Service has fought this project at every turn, and refused to act on the HCP at all. Presley met with the Sacramento Field office several times before drafting the HCP. We then submitted our HCP and Section 10(a) permit application and fee in October of 1998 and the following month had a formal meeting with Service staff to present our plan. At this and subsequent meetings, a Service staff biologist asserted that nearly the entire 575 acres constituted "habitat" for the butterfly, that the current unsuitability of the habitat for the butterfly did not matter, the fact that the species could no longer survive there without heroic management did not matter, and the four year complete absence of the species on the site (as confirmed by annual surveys) did not matter. He did not offer any empirical or scientific evidence to support any of these opinions. At the conclusion of this meeting, Service staff and management agreed to produce and deliver written comments to Presley's draft HCP within two weeks. The comments never came. After three and a half months of calls, and letters to the Chief of the Service's California/Nevada Operations Office which were never answered or acknowledged, we contacted the Field Supervisor of the Sacramento office. He said he had a letter from the Service to give us, but wanted to talk with us and Dr. Murphy first. We pointed out to the Field Supervisor of the Sacramento Of floe that since we had no listed animal species on site we could legally grade without having an incidental take permit. He agreed, and said he had told his staff that unless they cooperated in this engagement that they would lose their opportunity to influence this project. He also said that he was powerless to override or direct his subordinates' actions since he feared lawsuits from third party special interest groups. He concluded with saying that he was not going to give us the letter.

We then proceeded, obtaining the appropriate permits from California Department of Fish and Game, the U.S. Army Corps of Engineers and obtained a waiver from the Regional Water Quality Control Board. At every step, personnel from the Service repeatedly called and wrote these agencies demanding they deny Presley at every approval. In every instance, after extensive consultation, each agency agreed that the Service had no jurisdiction. In June, the Army Corps of Engineers authorized Presley to fill less than one half acre of wetlands and concluded that the Corps' permitting action would not affect listed species, thereby denying the Service a Section 7 consultation on the project. San Jose issued Presley a grading permit allowing for clearing of the site and Presley began work. The Service inexplicably passed on a Section 10, did not get a Section 7 consultation with the Corps and did not take Section 9 enforcement action. Instead, they stepped completely out of the regulatory process. First, they sent documents to private interest groups which were then used by these groups to sue another federal agency (the Army Corps) and Presley. Then they sent the City of San Jose threatening letters and e-mails asserting, with no substantiation, that grading the site would cause illegal "take" of the butterfly and the City would be held liable for such a "take". The Service urged the City to withhold any more grading permits. The City capitulated to these threats, explaining to Presley that the Service was holding up $3.5 million in Federal funds for City projects, that they did not want to upset the Service for fear that they would lose that money and would not issue Presley's further grading permits. We have been at a dead stop for almost 3 months now. We may not be able to grade until at least next spring at a cost of approximately $3 million. We have contacted every level of the service to get this resolved. They did acknowledge two weeks ago that there was no take, would be no grounds for a Section 9 action, and said that I could have a letter to that effect to show the City of San Jose. Although it has been promised on almost a daily basis, we just received a qualified letter this last Friday, October 15th. I ask you, where is the certainty in the regulatory process for me as an applicant? I ask you, how can it be acceptable to the Congress to have the Fish and Wildlife Service simply ignore the ESA and its duty to implement the Act, and instead wage an improper, ideological campaign to stop this project? What does the Service have against HCPs, especially one this generous? Unfortunately, for the endangered species, I'm afraid this is sending the wrong message to the development community, not to become involved in the HCP process. I think HCPs, in theory, are a great idea. Yet, we can't escape the irony here...the developer attempting to protect and restore the species, and the Service trying to block that effort.