Arizona endorses a company's plan to sell Colorado River water to Queen Creek

Ian James Arizona Republic
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Arizona’s top water regulator has endorsed a company’s proposal to take water from farmland near the Colorado River and sell it to the fast-growing Phoenix suburb of Queen Creek.

The plan, which still would require federal approval, has generated a heated debate about whether
transferring water away from the farming community of Cibola could harm the local economy, and whether the deal would open the gates for more companies to buy land near the river with the sole aim of selling off the water for profit.

Town leaders in Queen Creek have said the deal would help them reduce reliance on groundwater and improve their long-term water supplies to help support growth.

They’ve argued the water transfer would bring economic benefits and more tax revenues to the rural area and the state as a whole.

The company, GSC Farm LLC, sought state approval last year to permanently leave 485 acres of farmland dry and sell its annual entitlement of 2,083 acre-feet of Colorado River water — about 678 million gallons — to Queen Creek for a one-time payment of $21 million.

The Arizona Department of Water Resources endorsed the water transfer on Friday, recommending the federal government’s approval in a letter to the Trump administration. But ADWR Director Tom Buschatzke also recommended allowing the transfer of only a portion of the water — 1,078 acre-feet, a little more than half the proposed amount.

Buschatzke said he based this decision on seeking to keep enough water on the property to meet future needs as it’s developed for housing. In considering the proposal, Buschatzke said, his department had to weigh factors including “the beneficial use of the water after the transfer and any potential impacts on the western Arizona communities who rely on the Colorado River.”

Buschatzke said in a statement that allowing a portion of the water to be transferred would allow Queen Creek to meet the goals of the state’s groundwater management law “while avoiding negative impacts for established agricultural economies and growing urban areas in western Arizona.”

Water to the 'highest bidder'

The announcement drew criticism from Rep. Regina Cobb, R-Kingman, who represents Cibola and other farming communities near the river.

“I’m really disappointed,” Cobb said. “I feel like the state has abandoned the river communities.”

She said her fear, and the fear of many of her constituents, is that this water transfer sets a precedent and clears the way for many more deals in which farmland is bought and the water is sold, causing harm to the local economies.

“The biggest fear is that we are transferring wealth from one area to another,” Cobb said. “And it’s not just affecting that one small area of Cibola. It is affecting everybody downstream below that.”

She called for the federal Bureau of Reclamation to fully evaluate the effects of taking away the water from the community and allowing it to flow to the “highest bidder.”

Cobb said she’s concerned the deal will make farmland more attractive to Wall Street investment firms and hedge funds that are looking to do similar deals.

“The hedge fund groups have been planning on this and buying up property the last few years. This feeds right into their hands,” Cobb said.

The Department of Water Resources held a series of meetings to receive comments from the public on the proposed deal. The state received 872 written comments, 854 of them in opposition.

In his letter to Interior Secretary David Bernhardt, Buschatzke wrote that in several comments, people had raised concerns that this transfer “will serve as precedent for future transfers that will ultimately result in less water available to users on the Colorado River mainstem.”

Buschatzke said his department disagrees with that.

“Although others may propose to transfer Colorado River entitlements from the mainstem to central Arizona in the future, each entitlement is unique,” Buschatzke wrote.

He said the department will adhere to its established policies and “consider all of the facts associated with each proposed transfer.”