A ruling by a U.S. District Court judge could have a significant impact on construction in Florida, stalling some projects and pushing costs higher on many others.
In a scathing, 186-page decision, Senior U.S. District Judge William Hoeveler ruled that the U.S. Army Corps of Engineers failed to protect the environment by approving limestone mining on 5,000 acres (2,023 ha) of wetlands in the Everglades, ignored science, shut out the public and failed to consider less damaging alternatives.
The ruling closed three Miami quarries and seven others in the Lake Belt area of South Florida are under investigation. The mine operators affected by the order, Sawgrass Rock Quarry, Kendall Properties & Investments, Miami-Dade Limestone Products Association, Tarmac America LLC, White Rock Quarries South, APAC Florida and Florida Rock Industries, have all filed notices of appeal and a motion for a stay in the U.S. Court of Appeals in Atlanta
“Judge Hoeveler’s decision threatens one of Florida’s most important industries — it threatens planned and future road and highway projects, it threatens to dramatically increase the cost of every construction job in the state, it threatens tens of thousands of jobs associated with all of these projects, and most ironically, it threatens two of the most important environmental victories in Florida history — the Lake Belt Plan and Everglades Restoration,” said Kerri Barsh, an attorney representing two of the mining companies affected by the judge’s decision, White Rock Quarries South and APAC Florida. “His decision is incorrect, and will be immediately appealed. We are confident that the judicial and regulatory system will work fairly and fully so that the compelling public interest in the Lake Belt Plan will prevail.”
Tom MacVicar, a consultant for White Rock Quarries, said the company is disappointed with the ruling, which “does disparage the hard work of all the government professionals who have committed their careers to protecting the Everglades.”
Environmental activists from the Sierra Club and Natural Resources Defense Fund, who had sued to block the permits, were ecstatic. They said Hoeveler’s ruling should immediately halt all mining covered by those permits.
Hoeveler’s ruling follows his March 2006 decision to remand mining permits back to the Corps of Engineers and the U.S. Fish & Wildlife Service. In 2002, The Sierra Club filed a lawsuit in federal court challenging permits issued by the Corps of Engineers and the U.S. Fish and Wildlife Service in accordance with the Lake Belt Plan. Their lawsuit contended that agencies did not follow proper procedures in issuing permits.
The Lake Belt area is a 78 sq. mi. (202 sq km) region located on the western edge of Miami-Dade County’s urbanized area. Named for the quarry-lakes created when limestone is excavated, the Lake Belt provides a buffer between developed areas to the east and the Everglades to the west.
The area provides the highest quality and quantity of aggregate material in Florida, which uses 150 million tons (136 million t) of limestone annually. All of the limestone rock produced in the Lake Belt area is used for road projects, residential, commercial and industrial construction in Florida. None of it is sent out of state.
Florida Rock has sold 2.5 million tons (2.2 million t) of aggregates from its Miami quarry this year, generating $28 million in revenue. The rock costs about $20 to $25 a ton in Florida.
In June 2006, the court was informed that benzene, a carcinogen, had been detected in the county’s water supply, causing Miami-Dade’s water and sewer utility to shut down seven of 15 wells in the area, the order said.
“Our evidence shows that the benzene is not a present threat to the well-field and it is not necessarily attributable to the mining operations,” said John Baker, president/CEO of Florida Rock.
During an evidentiary hearing, the Florida Department of Transportation (FDOT) told the judge “any delay to production of aggregate from the Lake Belt mines will have an immediate, drastic and long lasting impact on the department’s ability to maintain and improve the state highway system.”
FDOT officials said the lack of aggregate and the increased costs involved in locating it from other sources will delay, and in some instances, cause cancellation of, ongoing and future construction projects, including projects in Monroe, Miami-Dade, Broward, Palm Beach, Martin, Indian River and St. Lucie counties.
Ananth Prasad, FDOT chief engineer, said the closings are currently affecting about 30 or 40 percent of the market supply.
“Right now we’re still trying to gauge the cost impacts,” Prasad said. “In the short term there’s actually stockpiled material there that they can use, so most ongoing jobs are going to be OK. We have been informed there may be additional cost issues. Some folks in south Florida have indicated they have to haul longer distances.”
He also said the price of rock went up 30 percent Aug. 1.
Florida Transportation Builders’ Association Inc. President Bob Burleson told the Jacksonville Business Journal that the remaining mined rock would last about 30 days.
“Obviously, it’s got to raise prices,” Burleson said. Aggregate supplies are trying to do the best they can at holding the prices for existing contracts.”
Burleson was out of town and could not be reached for further comment by CEG.
Prasad said the decision has the potential to stall many road construction projects in Florida.
“Ongoing jobs will be going on, but the cost is going to rise,” Prasad said. “What that does is cause us to push some new jobs to outer years. We have a fixed budget line and with the declining revenues in Florida, that bottom line is getting slimmer. On top of that, add this additional variable, and we may have to push some planned improvements out.”
Transportation officials estimate mining in that area affects about 19,000 jobs in Florida in several industries. State economists predict that a loss of just 5 percent of Lake Belt production would result in a loss of 24,627 jobs and $2.5 billion in lost economic output statewide. Hoeveler’s ruling calls for an immediate halt in roughly 35 percent of the Lake Belt mining acres.
While the ruling may have a devastating impact on Florida’s construction industry, Prasad said because of a slowdown in the residential housing market, more materials could be available for road construction.
“The only silver lining, if you can call it that, is the residential market has slowed, which could create some excess supply that residential construction was taking that could probably now come to transportation,” Prasad said. “If the residential market was as hot as it was a year ago, we’d have to maybe not go forward with some of the new projects to keep existing supply for ongoing projects.”
Prasad said the shutdown also will reach far beyond road construction.
“A lot of people view this as a road building thing, but it’s not,” Prasad said. “The Lake Belt rock goes into concrete that supplies malls, office buildings, condos.”
A couple of years ago, because of demand from China, the building industry suffered through a concrete shortage. Prasad hopes there won’t be a similar fallout from the mine shutdown.
“There was a cement supply issue when China was taking all the cement,” Prasad said. “That seems to have eased. When the residential market was going hard, we were seeing contracts being put on some sort of allocation of how much concrete they could buy at any one time.
“When rock prices go up, concrete prices go up.”
Though it’s possible the mines could reopen, that could take six months or longer. Currently, the U.S. Corps of Engineers is doing a supplemental environmental impact study, which will be presented to Judge Hoeveler.
“They have to answer all the questions the judge raised as far as groundwater contamination and the endangered species,” Prasad said. “The Corps draft should be out in a couple of months then it has to go to the public review process. It will probably be finalized by the end of the year.”
In the meantime, companies are scrambling to find alternate limestone sources, looking to mines in Georgia, Mexico and the Bahamas. Florida Rock recently purchased Freeport Aggregate Ltd. in the Bahamas to help ease shortages caused by the Lake Belt closings.
“Everybody’s worried,” Baker said. “We’re telling them to hang on until we can determine what the situation is.” CEG