Colorado Springs Utilities is celebrating what it touts as a historic water-sharing pact that will benefit agriculture in the Lower Arkansas River Basin and boost the city’s water supplies. But others point to the record of Karl Nyquist, a key figure behind the deal, as a reason to be skeptical.
The agreement vows to preserve farmland while helping to meet water demand in a growing city. But Nyquist has made similar promises that haven’t come to pass, sometimes leaving behind dried-up farmland.
The Pueblo Chieftain, which has followed Nyquist for years, wrote in a 2016 editorial of his “notorious history of diverting agricultural water from the Arkansas River Valley to the Northern Colorado cities surrounding Denver.”
The complex water deal boils down to this:
• The utility would get 2,500 shares of water through the Lower Arkansas Water Management Association. That’s about 2,100 acre-feet of water a year for five out of 10 years, in perpetuity. (An acre-foot of water is 326,000 gallons, enough to supply two typical families of four per year.)
• The utility would pay $8.75 million for the shares, about $3,500 per share. That represents about 13 percent of Lower Arkansas Water Management Association’s shares, said General Manager Don Higbee.
• The Lower Arkansas Water Management Association would get the water in the other five years to benefit about 210 shareholders, most of them farmers, Higbee said. That’s more water per share in those five years and could mean better crop yields.
• The Lower Arkansas Water Management Association also would get a place to store the water. A gravel pit near Lamar and $1.75 million from Colorado Springs Utilities would make that storage a reality.
The deal still must be approved by the state Water Court, which could take several years.
The water shares that Utilities has agreed to buy are held by C&A of Littleton, which owns two properties in the Lower Ark, known as Arkansas River Farms. C&A also owns the gravel pit in Lamar.
Nyquist is C&A’s principal and co-founder.
Utilities’ news release about the pact doesn’t mention Arkansas River Farms or Nyquist. It also doesn’t say that the utility’s $10.5 million payment — $8.75 million for the Lower Arkansas Water Management Association shares, plus $1.75 million toward storage — would go to one shareholder, Arkansas River Farms.
Nyquist isn’t a farmer. He’s a developer with a portfolio of multimillion dollar deals all along the Front Range. He’s also been generous with political contributions over the past half-dozen years.
For years, he has been active on water projects in the Lower Ark, and he’s ruffled some feathers. A 2011 Pueblo Chieftain editorial accused him of “peddling snake oil,” one of many Chieftain editorials that have criticized Nyquist in recent years.
In 2011, according to the Chieftain, Nyquist proposed a deal to sell the Lower Arkansas Water Management Association water to Elbert County southwest of Denver through a 150-mile pipeline at a cost of $350 million. He said the pipeline would bring jobs and tax revenues to Bent County. That deal never came to fruition.
Last year, said former Bent County Commissioner Bill Long, C&A went to county officials and promised to build a dairy on an Arkansas River Farms property that would employ 35 to 40 people. But it also would mean drying up the land and selling off the water rights.
County commissioners issued what’s known as a 1041 permit for about a third of the property. A 1041, named for the law that created it, allows local governments to maintain controls in development for areas and activities of “state interest.”
But that dairy deal has fallen apart, said Long, who worked with the county on the 1041 permit. “All of the water they’re selling is a result of drying up irrigated agriculture.”
The largest Arkansas River Farms property, about 18,000 acres, has a controversial history in water. Years ago, it was owned by High Plains A&M, which tried in 2002 and 2003 to obtain Water Court approval for a change in water use.
It asked to change its water rights from irrigation and other decreed uses to “any beneficial use, including over 50 identified potential uses, in any location within 28 Colorado counties,” says a write-up on the case by attorneys at the Greenwood Village-based law firm Burns, Figa & Will. “High Plains’ applications did not identify end users of the water beside the farmers who currently use the water.”
The Water Court rejected the application, calling it speculation. It’s illegal to buy water rights for speculative purposes in Colorado.
High Plains then sold the property to Pure Cycle, a Watkins-based publicly traded water company.
Pure Cycle sold the property three years ago to Arkansas River Farms.
Nyquist, through a spokeswoman, said some of his projects have “ended up keeping water in the (Lower Arkansas River) valley and bringing much-needed jobs to the area.”
But he acknowledged that some of his projects have and will dry up farmland, with the water headed elsewhere.
In the 2011 deal, another Nyquist company, GP Irrigated Farms, originally acquired 12,000 acres, of which 8,000 were irrigated, and developed plans to supply water to cities on the Front Range, Nyquist said.
“After challenges with a municipal contract and listening to negative input from a variety of stakeholders, I made the decision to take GP Farms in a different direction,” he said. That led to the gravel pit in Lamar, which employs 20 people, and a dairy in Prowers County, which he says will become “one of the largest agribusinesses in the region.”
As for the Bent County dairy, Nyquist said, the county’s resolution for the 1041 permit gives him three years to attract agribusiness there “to offset any potential economic impacts caused by the drying up of (Arkansas River Farms’) farm acreage.”
If those efforts fail, he said, Arkansas River Farms has agreed to provide Bent County with a $1.7 million letter of credit “to ensure no economic harm can come to Bent County as a result of the drying up of these farms.”
Despite noting that some of his projects will dry up farmland in the valley, Nyquist said Arkansas River Farms “has made no plans to ‘dry-up’ farms for water to be sold to the Front Range. Instead, Arkansas River Farms has been and continues to be focused on consolidating farm operations to its best parcels in the Arkansas River basin. The company has opted to use a combined approach of divesting unproductive farmland, consolidating water rights for ongoing farm operations or selling water rights and then dryland farming or restoring the remaining parcels to natural vegetation.”
In the deal with Utilities, 4,434 acres would be dried up, with another 843 acres already dried up “by other parties unrelated” to Arkansas River Farms, he said.
The company wants to consolidate and improve farming on its most productive parcels in the Arkansas River Basin, Nyquist said. The projects have created economic and job growth in the valley, with more than $100 million invested. “Our focus is supporting these investments and then by extension the local economy.”
If the proposition is to move water from lower-producing to higher-producing acreage, it makes sense economically and environmentally, said Matt Heimerich, a Crowley County farmer and three-term county commissioner with experience in water issues.
But Heimerich, the Palmer Land Trust’s conservation director for the Lower Arkansas Valley, also said his 31 years of experience taught him that when water is removed, revegetation succeeds only when surface or irrigation water is applied to grow a permanent cover. It can be a combination of native and non-native species, he said, but that might not have a high value for grazing.
Crowley County’s experience with revegetation in the 1970s is telling. When water rights were sold to Colorado Springs, Pueblo and Aurora, the planned restoration of more than 45,000 acres didn’t work.
“There was a significant breakdown of responsibilities for when those water rights were changed” to municipal use, Heimerich said. “In all fairness, the city of Aurora, when they bought 14,000 acres, they did do a relatively good job, rigorous in their revegetation efforts.”
But that also relied on another crop on the ground with grasses, and then applying water over one or more seasons. What broke down, he said, was a lack of follow-through in how those lands were managed and whose responsibility it was to steward the revegetated land into perpetuity.
Today, large swaths of the county, especially in dry years, look more like the dust bowl of the 1930s. Crowley went from 50,000 irrigated acres to 5,000 and even less in drought years.
The other proposal for dried-up farmland — dryland farming — hasn’t succeeded in the Arkansas River Valley either. Heimerich said he’s never seen a dryland crop in Crowley County, and neither has his family, which came to the county in the 1950s.
Dryland farming “is a terrible challenge,” he said, because soils changed after decades of farming. “It’s not that healthy, native soil that you would see on the prairie. It’s very silty. And when the ground has been used for crop rotation, its ability to sustain dryland seeding or farming is diminished.”