BankAmerica Corp. has unveiled a new program that helps it unload foreclosed real estate more quickly.
The San Francisco-based bank said last Friday that it plans to sell foreclosed property to real estate developers who are struggling to meet environmental regulations.
California developers who build on land where endangered species reside are required by state law to purchase replacement property to provide a new home for the animals.
This process means the developer has to search for the replacement land, get it approved by the state, and manage it.
The requirement can hold up a project for six months, said Jim Jackson, a BankAmerica vice president in the foreclosed properties department.
Now BankAmerica has speeded up the process by several months. The bank has formed a "conservation bank" on a 263-acre property in Carlsbad Highlands, a town outside San Diego.
The property, part of a $4.5 million trust, was foreclosed on by the bank in September. The property has been preapproved by California environmental agencies as appropriate replacement land for construction sites that stir up natural habitats.
Developers pay BankAmerica for the right to use the land. The bank has already sold 83 acres of replacement, or "mitigation," land to the state Department of Transportation for $1.1 million so the state agency could use other property that is home to the California gnatcatcher for a highway project.
The gnatcatcher, a small songbird native to Southern California, is listed under the federal Endangered Species Act.
"This is a commonsense, market-based initiative that will help move development forward while still providing a significant level of environmental preservation," said Michael Stein, a vice chairman at BankAmerica.
The fact that the conservation bank makes it easier for developers to build has created a fair amount of demand for BankAmerica's property. Thus, the bank can make back its money on foreclosed property more quickly and by charging more.
California Resources Under Secretary Michael Mantell said his agency and the federal Environmental Protection Agency will make the establishment of similar conservation banks throughout the state a priority by relaxing guidelines.