March 26, 2008

Ms. Lori Beckwith

Asheville Regulatory Field Office
U.S. Army Corps of Engineers
151 Patton Avenue, Room 208
Asheville, North Carolina 28801-5006

Dear Ms. Beckwith:

This is the report of the U.S. Fish and Wildlife Service and the Department of the Interior on the
U.S. Army Corps of Engineers’ (Corps) Public Notice (PN) of an Individual Permit Application
(IPA) submitted by Legasus of North Carolina, LLC, represented by Ms. Jennifer Robertson of
Wetland & Natural Resource Consultants, to develop 1,810 acres for a residential golf course
community south of Cullowhee in Jackson County, North Carolina. Information for this report is
based on a review of the IPA and the PN issued by the Corps. The report is submitted in
accordance with the provisions of the National Environmental Policy Act; Fish and Wildlife
Coordination Act, as amended (16 U.S.C. 661-667e); and section 7 of the Endangered Species
Act of 1973, as amended (16 U.S.C. 1531-1543) (Act).

The applicant is proposing to construct an 18-hole golf course and 20-hole short course, with
associated club house and comfort stations, and a residential development on the predominantly
wooded 1,810-acre tract of land. The project site contains several named and unnamed streams
(including Cherry Gap Branch, Mill Creek, Mine Branch, and Webster Creek) and about 5 acres
of wetlands. The named streams and several unnamed streams are primary tributaries to the
Tuckasegee River. The project will result in permanent impacts to 3,890 linear feet (lf) of
streams and 0.48 acre of wetlands from culvert installation. About 3,340 lf of stream impacts
and 0.45 acre of wetland impacts are proposed for the construction of the 18-hole golf course,
and the remaining 550 lf of stream impacts and 0.03 acre of wetland impacts will result from
proposed road crossings to access the residential development. The applicant is proposing
on-site mitigation to offset the impacts of the development.

Endangered Species - We did not see any evidence that surveys have been conducted for
federally listed species within the project site. Unless an area has been specifically surveyed for
listed species or no appropriate habitat exists, a survey should be conducted to ensure that these
resources are not inadvertently lost. We believe that habitat may exist within the project area for
the federally endangered small-whorled pogonia (Isotria medeoloides) and eastern small footed
bat (Myotis leibii) (currently listed as a federal species of concern). It is also possible that there
is suitable habitat (both summer and winter) for the federally endangered Indiana bat (Myotis
sodalis) in the project area. Though this species has not been found in Jackson County during
the summer months (breeding season), the species has been found in adjacent counties during the
fall migration period (August through October) and during the summer maternity period (April –
August). We believe the abandoned mines located within the project area could support winter
and/or summer roosting habitat for Indiana bat and/or eastern small footed bat.

In accordance with the Act, it is the responsibility of the appropriate federal agency or its
designated representative to review its activities or programs and to identify any such activities
or programs that may affect endangered or threatened species or their habitats. If it is determined
that the proposed activity may adversely affect any species federally listed as endangered or
threatened, formal consultation with this office must be initiated. Please note that federal species
of concern are not legally protected under the Act and are not subject to any of its provisions,
including section 7, unless they are formally proposed or listed as endangered or threatened. We
are including these species in our response to give you advance notification and to request your
assistance in protecting them.

According to the IPA, the subject project will directly impact tributaries to the Tuckasegee River.
Downstream of the project site, the Tuckasegee River has been designated as critical habitat for
the federally endangered Appalachian elktoe (Alasmidonta raveneliana). We are concerned
about any potential adverse effects the proposed culvert installation and consequent development
could have on the Appalachian elktoe’s critical habitat and its filtering activities (feeding and
respiration). Section 7 of Act requires federal agencies to assess the potential direct and indirect
effects, including potential secondary or cumulative effects, to federally listed species and/or
designated critical habitat of actions they fund, permit, or carry out. Federal agencies are also
required to consult with us if it is determined that the proposed action may affect listed species or
designated critical habitat. If the proposed project is constructed according to the current plans,
which would directly impact tributaries to the Tuckasegee River and severely decrease the width
of riparian buffers, we believe the project will adversely affect the Appalachian elktoe and its
designated critical habitat. The analysis of the impacts of the proposed project should include
the direct effects of the installation of the culverts and the activities that are “interrelated to, or
interdependent with, the proposed action under consultation.” We believe the Corps’ assessment
of the impacts of the proposed culverts should consider the proposed construction of the golf
course as an interdependent activity that must be evaluated for its potential impacts on federally
listed species and designated critical habitat. In other words, and in accordance with the
U.S. Fish and Wildlife Service and National Marine Fisheries Service Endangered Species
Consultation Handbook, we apply a “but for”1 test, (e.g., the project could not occur “but for” the
1
Taken from the U.S. Fish and Wildlife Service and National Marine Fisheries Service. 1998. Endangered Species
Consultation Handbook - Procedures for Conducting Consultation and Conference Activities under Section 7 of the
Endangered Species Act. Washington, D.C. Pages 4-26. As a practical matter, the analysis of whether other
activities are interrelated to, or interdependent with, the proposed action under consultation should be conducted by
applying a “but for” test. The biologist should ask whether another activity in question would occur “but for” the
proposed action under consultation. If the answer is “no,” that the activity in question would not occur but for the
proposed action, then the activity is interrelated or interdependent and should be analyzed with the effects of the
action. It is important to remember that interrelated or interdependent activities are measured against the proposed

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installation of the culverts). Consequently, we believe the secondary and cumulative impacts
from the federally permitted culvert installation, such as impacts associated with the construction
of this golf course, should be evaluated and used to formulate the Corps’ determination of effect
on the Appalachian elktoe and its designated critical habitat. Given the impacts of this project
(as currently proposed) on the Appalachian elktoe and its designated critical habitat, we
recommend that formal consultation be initiated with our office. A formal consultation initiation
package should include:

1. A description of the action being considered;

2. A description of the specific area that may be affected by the action;

3. A description of any listed species or critical habitat that may be affected by the
action;

4. A description of the manner in which the action may affect any listed species or
critical habitat and an analysis of any cumulative effects;

5. A description of any measures that will be implemented in order to minimize

any potential effects of the action on listed species and/or critical habitat;

6. Relevant reports, including any environmental impact statement,

environmental assessment, or biological assessment prepared; and

7. Any other relevant available information on the action, the affected listed
species, or critical habitat.

Until section 7 consultation is completed, we recommend that the permit be held in abeyance.

We are particularly concerned with the potential adverse effects the project could have on the
Appalachian elktoe and the Tuckasegee River as a result of the culvert installation; loss of
riparian buffers; use of pesticides, herbicides, and fertilizers on the golf course; and increased
amount of impervious surface area. However, we can concur with a not likely to adversely affect
determination if measures are implemented that will further minimize the direct, indirect,
secondary, and cumulative effects of this project. There are a number of measures that we
believe would allow the stream crossing and minimize impacts; we suggest that the following
measures be considered:

1. Minimize the impacts associated with the golf course amenity. According to the
IPA, about 905 lf of stream channel will be impacted from the construction of a
driving range, and about 1,125 lf of impacts will result from the construction of
holes #1 and #18. This accounts for more that 60 percent of the total proposed
impacts for the construction of the golf course. Though we agree that it is
difficult to construct the golf course and avoid all aquatic impacts, we believe the
impacts associated with the driving range can and should be avoided. All

action.

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 alternatives that would allow for the construction of the driving range while
avoiding impacts to the on-site streams should be addressed. Because the site is
primarily undeveloped, we strongly recommend that the clubhouse, holes #1
and #18, and the driving range be relocated. The IPA states that the site for the
clubhouse was chosen for the views and central location and because “the
clubhouse location was chosen, in effect, so were the locations of those holes (#1
and #18) and driving range.” Therefore, we can assume that an alternate
clubhouse location can be chosen that would avoid the proposed impacts from the
driving range and holes #1 and #18.

2. Use grassed swales in place of curb and gutter and on-site storm-water
management (i.e., bioretention areas) that will result in no net change in the
hydrology of the watershed. All storm-water outlets should drain through a
vegetated upland area prior to reaching any stream or wetland area. Sufficient
retention designs should be implemented to allow for the slow discharge of storm
water, attenuating the potential adverse effects of storm-water surges; thermal
spikes; and sediment, nutrient, and chemical discharges.

3. Preserve and/or restore forested riparian buffers. Given the increased use of
fertilizers, herbicides, and pesticides, and the increase in impervious surface and
storm water runoff that will occur as a result of the subject project, we are
concerned about the loss and lack of riparian buffers. Forested riparian buffers, a
minimum of 200 feet wide along perennial streams and 100 feet wide along
intermittent streams and wetlands, should be created and/or maintained along all
aquatic areas. (If construction activities and site plans require the removal and/or
decrease in width of riparian buffers below the above recommended buffer
widths, the applicant should address these potentially adverse impacts to water
quality and the Appalachian elktoe.) Riparian buffers protect water quality by
stabilizing stream banks, filtering storm-water runoff, and providing habitat for
aquatic and fishery resources. In addition, riparian buffers provide travel
corridors and habitat for wildlife displaced by development.

4. Minimize the use of chemical treatments (fertilizers, pesticides, and herbicides) to

the greatest extent possible. Product labels for most fertilizers, pesticides, and
herbicides indicate they are toxic to aquatic organisms. We recommend that the
Webster Creek Golf Course strictly adhere to fertilizer, herbicide, and pesticide
labeling to ensure that these chemicals are not directly applied within the
above-stated buffer zones.

5. Install and maintain stringent measures to control erosion and sediment in order to
prevent unnecessary impacts to aquatic resources within and downstream of the
project site. Disturbed areas should be reseeded with seed mixtures that are
beneficial to wildlife. Fescue-based mixtures should be avoided. Native annual
small grains appropriate for the season are preferred and recommended.
Perimeter erosion-control devices should be installed prior to any on-the-ground

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 activities. Frequent maintenance of these devices is critical to their proper
function in order to minimize sediment discharge from the project site.

6. Minimize the amount of impervious surface area that will result from this project.
We recommend that all parking areas be constructed of a pervious material (i.e.,
pervious concrete, interlocking/open paving blocks, etc.). Pervious materials are
less likely to absorb and store heat and are less likely to allow the cooler
temperatures of the earth below to cool the pavement. Pervious concrete also
requires less maintenance and is less susceptible to freeze/thaw cracking due to
large void spaces within the concrete. Pervious parking areas minimize changes
to the hydrology of the watershed, can be used to facilitate groundwater recharge,
and often eliminate the need for curb and gutter for drainage.

7. Implement low-impact-development designs into the project plans. We

recommend that a rooftop garden, or a “green” rooftop, design be incorporated
into the building construction plans. Green rooftops have many benefits,
including: (a) keeping buildings warmer by adding a layer of insulation to the
roof and keeping buildings cooler by allowing plants to take in water that
evaporates into the atmosphere, resulting in lower heating and cooling bills;
(b) reducing the amount and improving the quality of storm-water runoff because
water is absorbed and filtered through plants and soil; and (c) improving overall
air quality by removing particulate matter from the air. This, along with the
proposed devices that will be constructed to collect storm-water runoff, will
dramatically decrease the amount and increase the quality of storm-water runoff.

8. Keep equipment out of streams by operating from the banks in a fashion that
minimizes disturbance to woody vegetation. Equipment should be inspected daily
and should be maintained to prevent the contamination of surface waters from
leaking fuels, lubricants, hydraulic fluids, or other toxic materials. All fuels,
lubricants, and other toxic materials should be stored outside the riparian
management area of the stream, in a location where the material can be contained.
Equipment should be checked for leaks of hydraulic fluids, cooling system
liquids, and fuel and should be cleaned before fording any stream. Also, all
fueling operations should be accomplished outside the riparian management area.

Alternatives – Section 404(b)(1) guidelines prohibit the filling of wetlands or streams for
nonwater-dependent activities when practicable alternatives exist. The golf course (including
practice areas, driving range, etc.) is not a water-dependent activity because practicable
alternatives exist that will avoid impacts to aquatic resources. The proposed golf course will
directly impact 3,340 lf of stream and 0.45 acres of wetlands. We believe there are multiple
alternatives that have not been addressed by the applicant. According to Golflink’s national golf
directory (http://www.golflink.com/golf-courses/course-directory.asp), there are over 29 golf
courses within a 20-mile radius of the project site. Therefore, the use of other golf courses in the
area is a practicable alternative. Also, we believe this golf course could be redesigned to further
avoid/minimize impacts. We believe the wetlands and streams could be designed as part of the
course; they could be played as water hazards, thereby eliminating the need for fill within the

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wetlands and streams. We recommend that a more detailed alternatives analysis be required and
submitted for review as well as a more detailed statement of how direct and indirect impacts to
aquatic resources have been minimized.

Special Aquatic Sites – According to the guidelines set forth in 40 CFR (Code of Federal
Regulations) Section 230.45, riffle and pool complexes and wetlands are considered special
aquatic sites.2 Section 230.45(b) of 40 CFR covers the possible loss of values that can occur
from the discharge of fill material into special aquatic sites, such as the riffle-pool complexes and
wetlands found on the project site. The regulation states that the discharge of fill material can
adversely impact and/or eliminate riffle and pool areas by reducing the aeration and filtration
capabilities at the discharge site and downstream, reduce stream habitat diversity, and may retard
repopulation of the discharge site through excessive sedimentation and the creation of unsuitable
habitat. Potential adverse impacts to wetlands from the discharge of fill into wetlands includes
the reduction of nutrient exchange and the productivity of the wetland system leading to a
degradation of water quality; can change wetland habitat value for fish, wildlife, and wetland
plants; and can modify the capacity of wetlands to retain and store floodwaters. The applicant
has yet to provide any evidence that the construction of this project as proposed will not cause
water quality degradation. Given that a majority of the aquatic resources on the project site are
considered special aquatic sites (as described in the CFR), we recommend that stringent
measures be taken to completely avoid impacting the streams and wetlands on this property and
to minimize, control, and treat storm-water runoff, including golf course and residential
pollutants (e.g., fertilizers, pesticides, herbicides, etc.).

Mitigation – The applicant is proposing on-site mitigation to compensate for the impacts
associated with this project. Based on the current plans, the applicant will need about 7,780 lf of
stream mitigation credits and about 0.96 acre of wetland mitigation credits. The proposed
mitigation plan for stream impacts consists of restoring 160 lf of stream channel, enhancing
level 1 activities on 2,608 lf of stream channel, enhancing level 2 activities on 1,774 lf of stream
channel, preserving 5,845 lf of stream channel with 50-foot buffers, and preserving 34,844 lf of
stream channel with 30-foot buffers. Proposed mitigation for wetland impacts consists of
restoring 0.96 acre of wetlands, preserving 2.7 acres of wetlands with 50-foot buffers, and
preserving 0.35 acre of wetlands with 30-foot buffers. Though we agree that the wetland
mitigation plan is adequate, we do not believe that the stream mitigation plan is adequate. Given
the large amount of development, the increase in impervious surface area, the loss of riparian
buffers, and the considerable amount of stream fragmentation (from culvert installation) that is
proposed for this project, we do not believe an on-site mitigation plan can be established that
would adequately offset the direct and indirect impacts associated with this project. If the Corps
finds justification to permit this project as proposed, we recommend that the applicant resubmit
an in-kind, off-site mitigation plan that will compensate for the impacts of this project.

As stated, the applicant has not provided any evidence of surveys for federally listed species that
may occur within the project site. Also, we believe this project, as currently proposed, will
adversely impact the federally endangered Appalachian elktoe and its designated critical habitat.
2
40 CFR Section 230.3 (q-1) - Special aquatic sites are geographic areas, large or small, possessing special
ecological characteristics of productivity, habitat, wildlife protection, or other important and easily disrupted
ecological values. These areas are generally recognized as significantly influencing or positively contributing to the
general overall environmental health or vitality of the entire ecosystem of a region.

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If impacts cannot be further minimized and if the above-stated measures cannot be implemented,
formal consultation must be initiated. Until surveys for federally listed species have been
conducted within the project site; and until the above measures are implemented or formal
consultation is initiated and concluded, we recommend that this application be held in abeyance.

Our mission is to conserve, protect, and enhance fish, wildlife, and plants and their habitats for
the continuing benefit of the American people. By working with you and giving you the
appropriate information early in the planning process, we hope to accomplish this goal. We
appreciate the opportunity to provide these comments. If we can be of assistance or if you have
any questions, please do not hesitate to contact Mr. Bryan Tompkins of our staff at
828/258-3939, Ext. 240. In any future correspondence concerning this project, please reference
our Log Number 4-2-08-137.

Sincerely,

Brian P. Cole
Field Supervisor

cc:
Mr. Kevin Barnett, North Carolina Department of Environment and Natural Resources, Division
of Water Quality, 2090 US Hwy. 70, Swannanoa, North Carolina 28778
Mr. David McHenry, Mountain Region Reviewer, North Carolina Wildlife Resources
Commission, 20830 Great Smoky Mtn. Expressway, Waynesville, NC 28786