On June 25th, Vidler Water Company announced two sales of water rights totaling 570.52 AF to residential developers.
The first transaction involves 500 AF in Lyon County. Vidler owns 1,350 AF of municipal and industrial water rights in the area and owns or has under option another 4,950 AF of Carson River agricultural rights. The developer is paying $20,000/AF for the 500 AF, which will be used for residential development. In addition, the parties have agreed to cooperate in the future on dedication of right-of-way easements, temporary construction staging areas, and negotiation of financing agreements for certain infrastructure requirements that may be imposed by Lyon County Utilities. This was first sale of Vidler’s rights in Lyon County.
Vidler President and Chief Executive Officer Dorothy Timian-Palmer highlighted the significance of both the sale and the agreement for future cooperation.
“We are very pleased to see the first of what we believe to be several residential developments in the Carson/Lyon area take down a substantial portion of our existing water rights in the region. We are also pleased to be able to include in the agreement future cooperation with the buyer for a wide variety of infrastructure issues for extending our existing water rights further east along the Highway 50 corridor. We believe this to be highly strategic for our remaining water rights in the Carson/Lyon region. The agreement allows for the potential to minimize future water and sewer infrastructure expansion costs adding value to our remaining water rights which we estimate could exceed $5,000 per acre foot as we help facilitate development eastward along the Highway 50 corridor. Co-operative and collaborative relationships with our buyers have proven to be mutually beneficial to their projects and to our assets,” said Timian-Palmer.
Under the second transaction, Fish Springs Ranch LLC, a subsidiary of Vidler, sold 70.52 AF of groundwater rights from the Fish Springs Ranch property in northern Nevada at a price of $35,000/AF. The buyer will use the water for multi-family residential units in the North Valleys.
Fish Springs Ranch has been a long-standing project. In, 2002, Vidler acquired the ranch, which includes 7,500 acres of ranchland and 13,000 AF of fully permitted groundwater rights in the Honey Lake Basin, of which 8,000 AF can be moved to the North Valleys area, where it would support at least 16,000 homes. In 2006, those 8,000 AF were dedicated to Washoe County to hold in trust for future municipal use. With the consolidation of the Washoe County Water Department into Truckee Meadows Water Authority (“TMWA”) at the end of 2014, TMWA now holds the water rights. Vidler constructed a 35-mile pipeline to deliver the water to Reno’s North Valleys area and dedicated it to the Truckee Meadows Water Authority in 2009. (For additional background on Fish Springs Ranch, see “Washoe County Approves Vidler’s Honey Lake Project,” Water Strategist January 2006, “Transactions,” Water Strategist April 2006, and “PICO Raises Financing for Fish Springs Ranch Pipeline,” Water Strategist May 2006).
Of the Fish Springs Ranch transaction, Timian-Palmer said, “We are also very pleased to start selling some of our inventory of Fish Springs Ranch water rights to residential housing developers. We believe the North Valleys region is a very good location for much needed housing in the Reno/Sparks area and it is good to see developments coming on line to ameliorate the region’s lack of housing supply. The agreement to sell our water rights in this transaction is through our arrangement with Truckee Meadows Water Authority (TMWA). We are very pleased to partner with TMWA and assist them to provide water to new residential and commercial developments as robust growth continues to occur in the region.”
Written by Marta L. Weismann