Pure Cycle sells 14,600 acres under the Fort Lyon Canal

Straight line diagram of the Lower Arkansas Valley ditches via Headwaters
Straight line diagram of the Lower Arkansas Valley ditches via Headwaters

From The Pueblo Chieftain (Chris Woodka):

Farmers on the Fort Lyon Canal were shocked by news that 14,600 acres of farms on the Fort Lyon Canal were sold this week.

“The writing’s on the wall,” said Dale Mauch, a farmer who sits on the Fort Lyon board. “I’ve heard stories of three different dairies being built. If you see that happening, you know the water’s going to stay. If you don’t, we’re in trouble.”

Pure Cycle Corp. announced the pending sale of the farms to Arkansas River Farms LLC, an affiliate of C&A Companies and Resource Land Holdings LLC. C&A earlier backed a plan to pipe water from the Lamar Canal to the Front Range. Resource land has more than $550 million in assets in 25 states and Canada.

“Most people are still in shock,” Mauch said. “They’re asking, ‘When’s this company going to quit?’ They’ve got big money from back East. Is what happened to the Amity going to happen to us?”

Right now, no one can say.

Karl Nyquist, a principal with C&A, has not returned calls from The Pueblo Chieftain seeking more information about future plans. C&A is a Colorado real estate firm with residential and commercial real estate developments. But it also has 15 years of farming operations in the Lamar-Holly area, partnering with local farmer Bill Grasmick.

In 2011, Nyquist announced a plan, as GP Water, to pipe some of the water from Lamar Canal to the Front Range. Pure Cycle’s Fort Lyon farms have been targeted for dry-up so the water can be piped north.

But Mauch can see the effects of this sale.

Just 20 years ago, farms on the Fort Lyon, the largest canal in the Arkansas Valley, were selling for $700-$800 per acre (with water). When High Plains started buying farms in 2001, the price jumped to $1,500-$1,750 per acre. The latest sale raises the bar to $3,600 per acre, and there is talk that more sales are coming — up to $4,000 per acre.

“My son tried to buy a farm recently and the land was appraised at $2,500 an acre,” Mauch said. “With $4 corn and $150 hay, at $4,000 an acre? I can’t do it.”

He’s worried about the Fort Lyon after watching what’s happened next door on the Amity Canal. Tri-State Generation and Transmission purchased half of the Amity Canal beginning in 2005. He’s also worried that Main Street, Lamar, will be battered if water starts leaving the area.

Mauch believes such sales are inevitable as long as Front Range cities continue to grow.

“I can’t blame a guy for selling at this kind of money,” Mauch said. “These guys aren’t bad guys. They’re not doing anything illegal. The Front Range is going to continue to grow. It’s the way of the world. If GP doesn’t do it, the next company is going to do it.”

And what about the state water plan?

“I’d like to write the last page,” Mauch said. “Dear Governor Hickenlooper: After reading all this, here’s what it comes down to: You’ll only get the water you need at the expense of agriculture, because that’s where the water is. You only need it for growth.”

More Arkansas River Basin coverage here.

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