Shareholders on the Excelsior Ditch are considering Two Rivers’ offer for a controlling interest

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From The Pueblo Chieftain (Chris Woodka):

Shareholders want more time to consider a deal that would give a water and farming company controlling interest in the Excelsior Ditch east of Pueblo. A meeting of the Arkansas Groundwater Users Association scheduled for next week likely will be postponed in order to give members more time to consider the sale of the Excelsior Ditch to Two Rivers Water & Farming Co. Details of the sale were explained at three separate meetings Tuesday.

“Over the past month, it’s become clear we need more time to see the final product,” said Scott Lorenz, AGUA manager. “There’s a big list of things to take care of and no guarantee they’ll do any of the things they say they will.”

Shareholders who attended the meetings expressed concerns that Two Rivers might sell the assets, take water out of agriculture or fail to build promised storage. Lorenz and attorney Jeff Kahn assured them the contract would prevent damage to AGUA and provide off-ramps for AGUA to exit the contract. “There are substantial benefits to AGUA if Two Rivers can pull this off,” Kahn said.

Still, there are benefits to AGUA if Two Rivers purchases the Excelsior for $3.5 million, he said. The sale would pay off a $1.5 million loan AGUA obtained from the Colorado Water Conservation Board. More importantly, it could give AGUA guaranteed storage space, the opportunity to lease the water back cheaply and additional water from a “toll” charged by Two Rivers to use its proposed reservoir.

Two Rivers wants to build reservoirs on sites it is purchasing from Southwest Farms. The contract under consideration would give AGUA 10 percent of storage space, up to a maximum of 2,500 acre-feet. It also would give the group some of the water Two Rivers plans to charge outside clients such as cities that would use the reservoirs. “That’s the jewel,” said shareholder Ron Fillmore. “But on the other side, this is not something we couldn’t have all for ourselves.” “But this accelerates it,” Lorenz said, adding that Two Rivers can raise money to build reservoirs sooner rather than later.

From The Pueblo Chieftain:

EXCELSIOR’S VALUE

Two Rivers Water & Farming Co. is proposing to buy about 53 percent of the Excelsior Ditch from the Arkansas Groundwater Users Association.

● The other 47 percent is owned by the Stonewall Springs Quarry LLC, Colorado Springs developers represented by Mark Morley.

● As many as five separate reservoir sites have been identified. The Pueblo Board of Water Works, Colorado Springs and Aurora were interested in obtaining the Stonewall Springs site in 2005 as a possible place to store flows bypassed through Pueblo in the recovery of yield program.

● The ditch annually yields about 700 acre-feet of water, on average. This year, the total will be much less. That’s a small part of AGUA’s total need for 6,000 acre-feet, on average, most of which is leased. AGUA will use only about 30 percent this year, and sources of water are getting harder to find.

● The ditch also is used to move AGUA water to recharge ponds that help the well group meet augmentation requirements.

From The Pueblo Chieftain (Chris Woodka):

An entrepreneur who plans to grow high-dollar crops in Pueblo County said his plans to develop reservoirs on the Excelsior Ditch will benefit agriculture first. “We’re only going to contract with interests that would support agriculture and help in our goal to develop higher value vegetable crops,” John McKowen, CEO of Two Rivers Water & Farming Co., said Tuesday.

Shareholders of the Arkansas Groundwater Users Association will vote in coming weeks on a proposal by Two Rivers to buy controlling interest in the Excelsior Ditch, one of AGUA’s assets in providing water for wellaugmentation plans, for $3.5 million. The plan also would give AGUA some storage space in a 4,110 acre-foot reservoir Two Rivers is planning to build on the Excelsior Ditch, located east of Pueblo. Two Rivers last month secured a $10 million Colorado Water Conservation Board loan toward the $12.5 million project. AGUA’s board of directors approved the sale of its Excelsior Ditch shares — 53.77 percent of the total — last month. Two Rivers benefits from AGUA as well, using its shares in order to operate wells on farms it has purchased on the Bessemer Ditch. Two Rivers also made some water it has leased from the Pueblo Board of Water Works to AGUA this year.

This year, the company will plant about 250 acres on the Bessemer Ditch in cabbage and pumpkins. It also is farming about 150 acres in Huerfano County under its Orlando Reservoir system.

While McKowen is in discussion with the Pueblo water board about storage partnerships, he said his main interest will be to get more water to crops. “We need to store water to have an effective augmentation plan,” McKowen said. “We think we’re going to succeed. I’ve got the funding to build the reservoir without the participation of the cities.”

More Arkansas River Basin coverage here and here.

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