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A company made millions selling farmland water rights to Queen Creek, and the practice is growing

A water transfer from a small western Arizona town to a growing East Valley community has some observers concerned.

About a decade ago, a company called Greenstone bought nearly 500 acres of land in the town of Cibola, in La Paz County. But, a few years later, Greenstone sold the water rights for that farmland to Queen Creek. In the process, the company made about $14 million in profit.

Since then, La Paz and two other Arizona counties have sued the U.S. Bureau of Reclamation, arguing the agency didn’t consider the long-term implications when it approved the deal. A judge this year sided with those counties, and told the bureau to essentially redo its environmental assessment of the arrangement.

But even with that ruling, there are questions about what’s next for Cibola, since water that had been used for land there is already flowing to Queen Creek.

Maanvi Singh, a West Coast-based reporter for the Guardian, has reported on this. She joined The Show about the arrangement to move water from Cibola to Queen Creek. 

Full conversation

MARK BRODIE: At its core, what was behind this arrangement to move water from Cibola to Queen Creek?

MAANVI SINGH: Yeah. So there's a company called Greenstone and about a decade ago, they bought some farmland in this small town of Cibola in western Arizona. And a few years back, they sold the water rights, the Colorado River water rights, that was being used to irrigate farmland in Cibola. They just sold out water to the town of Queen Creek. And now that same water that's being, that was used to, you know, irrigate alfalfa and cotton, that's now flowing through the taps of people who live in Queen Creek.

BRODIE: Well, as you report, that has meant that those fields in Cibola are now basically dry and fallow, right?

SINGH: Yes.

BRODIE: And how did they actually make this work? Like how did it come to be that the water in this western Arizona town would not be used for agriculture but would in fact be used for growth and development in the Phoenix area?

SINGH: Yeah. So that was sort of what I got really curious about is like, how did this happen? Especially because it can be quite like complicated and bureaucratic to transfer water. And, you know, of course, it's not unusual at all that like Colorado River water is like being used by a city, right? Like lots of cities use Colorado River water.

But what was sort of unusual about this was that this was a private company, a corporation with this sort of explicit mission to broker water deals. And they were the ones who basically facilitated this by buying the farmland and then sort of finding this client that they were able to sell the water to. And some of the factors that went into allowing that to happen is well, number one, you know, there's just like a massive shortage of water, right? And so now there's this kind of increased demand.

And then in Cibola, what is kind of interesting is that this area, this region, it seems to have been founded by people who anticipated this kind of demand. You know, some of the founders who made the charter for the local irrigation district. And you know, the kind of inheritors and descendants of that really have this mindset like, yes, we're farmers, but we also absolutely have the right to and maybe even want to sell our water, we want to be able to profit from that.

BRODIE: Well, that's such an interesting component of all this because, as you report and as you just said, certainly there were people beyond just Greenstone that were looking to sell their water to, to some other location, to some other entity. What has the reaction been both from, you know, the folks who are pleased with this and folks who are unhappy with it? Like how, how is that sort of dichotomy kind of manifested itself in that part of the state?

SINGH: Yeah, I mean, I think for, from the perspective of these water brokerage companies of which Greenstone is, you know, one of many, there's also Vidler [Water], Water Asset Management. From the perspective of those companies, they see themselves as like providing an essential role. You know, they're like, water is gonna be harder to come by and we're going to make it easy for customers, mainly like municipalities, developers, to be able to supply their developments. We're playing this role.

From the town of local officials in rural Arizona, they really see this as kind of a threat to rural communities, right? Like, it's one thing if you have one 500 acre farm go fallow in order to, you know, send the water somewhere else. But if you have more and more farmland that's being followed in order to send water out to, you know, cities and suburbs, like what happens to these rural towns? That's like a really big fear. And I think there's also like a little bit more of a stepped back worry where, like, there's water shortages everywhere and we're gonna have to do cutbacks and, you know, various states are trying to negotiate a deal to reduce their usage of the river's water. And, you know, they're worried that private companies are just going to come in and sort of be able to intercept that. They're gonna be able to get water, sell it to the highest bidder. That's gonna be causing this sort of inequality between communities that can afford that water at that rate versus communities who can't. And it also means like that's just like another complication as officials are trying to negotiate these, like, big level, like deals on how to have enough water for everybody and where it should go.

BRODIE: Right. Well, and one of the people you quoted basically referred to this as opening Pandora's box, predicting more of these kinds of deals down the road and seemingly to what you were just talking about, really worried about what that might mean for the future of rural parts of Arizona and maybe rural parts of other states as well.

SINGH: Yeah. And I think, you know what I found really bore out that, that worry is not unfounded. You know, Greenstone itself has acquired thousands of acres of farmland and the attached water rights in this kind of part of western Arizona. There's also other companies that have acquired thousands of acres of land and the water rights. And they all have the same aim of selling the water. Demand's going up. So like, yeah, this probably is going to be the first of many. And also sort of because of the way that these rural or agricultural irrigation districts work, like having more land means, having more influence.

BRODIE: So for companies like Greenstone, like, what do they say about the fact that rural community leaders are concerned about the future of those communities as they're shipping water from rural parts of Arizona to more suburban or urban parts?

SINGH: You know, unfortunately, they did not respond to me directly through multiple outreach efforts, which I, I really wish they had because I wanted to know a little bit more about kind of their thinking. But at least in public statements, they've sort of, I would say they've kind of tried to make a couple arguments. One being, oh, well, this is just one deal. Like, I don't know what you're talking about. This is just one deal. It's gonna be one little farm that's not gonna be a farm anymore. We're gonna figure out something else to do with that land. You're overreacting. Like that's kind of been the vibe of what they've said at, you know, public hearings about this.

They've also said like, yeah, like in the future, there are decisions to be made about how water will be used and communities need water. Like that's like a good way to use water. We're just helping make that happen. You know. This, this isn't Greenstone specifically, but other companies like it, like Water Asset Management has also sort of publicly said, like they see themselves as solution to the water crisis that we're facing. They are going to make it easier for, you know, for communities to get water. And so they're really advertising themselves as a part of this drier future that we're facing, right?

KJZZ’s The Show transcripts are created on deadline. This text may not be in its final form. The authoritative record of KJZZ’s programming is the audio record.

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Mark Brodie is a co-host of The Show, KJZZ’s locally produced news magazine. Since starting at KJZZ in 2002, Brodie has been a host, reporter and producer, including several years covering the Arizona Legislature, based at the Capitol.