In Arizona, ‘Water Ranches’ Serve as Insurance Policy for Cities

This dusty desert land called Planet Ranch seems light years away from the trendy restaurants and upscale homes of Scottsdale, a posh, growing Phoenix suburb. And 180 miles away in far western Arizona, it might as well be.

But this is Scottsdale property, and with it go the water rights to the 8,400-acre farm.

Welcome to water ranching, just one facet of the shell game that is water rights in this parched state, where distant property and rights to faraway water are bought and sold as growing cities seek to quench their thirst in the future--if only on paper.

Water was the sole reason that Arizona cities snapped up ranches and farms like this one in the mid-1980s. The cities hoped that they could tap water on remote properties to supply the growing urban areas if other water sources dried up or couldn’t keep pace with demand.

“When you start running out of municipal supplies, you start looking around and figuring out who has less money than you do,” said Steve Olson, a lobbyist for the Arizona Department of Water Resources.

Larry Byers, a longtime Parker-area resident who now works for Scottsdale on the ranch, said people around here thought it strange that a city so far away would buy this land just for its water rights.

“I thought they could find water closer than out here. The reaction was mixed, because they didn’t know what was gonna happen to Planet Ranch,” he said as his truck bounced through miles of desert washes on the way to the ranch.

Rural communities reacted with alarm as such sales continued. Water ranching stopped in 1991 after officials from rural areas complained to the Legislature that the practice threatened their water supplies and potential for growth. But cities that bought water ranches before then were able to keep them.

In theory, Scottsdale could someday run a pipeline from Planet Ranch. Instead, it went another direction in the early 1990s and bought a portion of the rights the smaller cities of Prescott, Payson and Nogales hold in the Central Arizona Project, the 336-mile canal that brings Colorado River water to Phoenix and Tucson.

By selling their rights in the project, the smaller cities--which are far away from the canal--were able to use the money to buy and tap water closer to them.

That left Scottsdale trying to sell Planet Ranch. And that hasn’t been easy.

The remote ranch 30 miles outside Parker cost Scottsdale $11.4 million. The city has had only one serious bid--$25 million--for the ranch since it went on the block three years ago, said Bob Burlese, Scottsdale’s water resources director. That deal fell through.

Burlese suspects the ranch’s remote location is the reason for the lack of interest. A trip to the ranch requires a long drive on a dirt road that runs up desert washes.

The city leased the ranch to farmers until about five years ago to pay the La Paz County property taxes. Now, the once-green alfalfa fields have dried up, and the ranch has become a $250,000 to $300,000 drain on the city.

But ranching water has not fallen out of favor with everyone.

The Denver suburb of Aurora continues to acquire water rights from ranches across Colorado. Doug Kemper, Aurora’s water resources manager, said the city has tried to avoid buying land the way Arizona cities did.

Instead, Aurora buys a portion of the available water on ranches and farms and pipes it into the city. Aurora now gets about half of its water from ranches and land outside the city, Kemper said.

While most Arizona cities are sitting on their ranches, Tucson uses a ranch in Avra Valley, 12 miles to the northwest, to get water to about 28,000 families a year.

Ranches owned by other cities are considerably farther away.

Though they have no immediate need for the water, both Phoenix and suburban Mesa have decided to hold on to their ranches.

Mesa is making plans to use the water on its ranch near Coolidge, about 50 miles south, said Beth Miller, Mesa water resources coordinator. The city expects to begin drawing on water from the 12,000-acre farm by 2010 to feed the east side of the city, she said. Officials haven’t decided whether to run a pipeline or trade the rights for canal water.

Phoenix doesn’t have immediate plans for its ranch about 100 miles west of the city near Salome, but it’s keeping it anyway.

“It’s a huge insurance policy. It’s--excuse the pun--for a non-rainy day,” said Bing Brown, spokesman for the Phoenix water resources department.