Cadiz Inc. Announces US Bureau of Land Management Has Concluded Cadiz Water Project Is Within Scope of Railroad Right-of-Way
October 16 2017 - 8:30AM
Today, Cadiz Inc. (NASDAQ:CDZI) (“Cadiz”, the “Company”)
announced that the United States Bureau of Land Management
(“BLM”) has issued a letter (“BLM Letter”) to the Company, the
Santa Margarita Water District (“SMWD”) and the Arizona &
California Railroad (“ARZC”) finding that the Cadiz Water Project’s
proposed use of the existing ARZC right-of-way to construct a
pipeline and related railroad improvements “furthers railroad
purposes” and concluding that the Project is within the scope of
the original right-of-way grant. The BLM Letter also formally
rescinds the agency’s controversial and widely criticized October
2015 evaluation of the Project’s proposed ARZC right-of-way use, an
evaluation that sought to keep the Project from utilizing this
sensible corridor. As a result, no further federal permits and
authorizations are required for Project construction within the
ARZC railroad right-of-way.
“The company is very pleased to receive this letter from the BLM
regarding the Project’s proposed use of the railroad right-of-way,”
said Scott Slater, Cadiz President and CEO. “We have long
maintained that the 2015 evaluation by BLM was wrong on the law,
wrong on the facts and inconsistent with the policy driving
co-location of infrastructure in existing rights-of-way to minimize
project footprints and environmental harm.” Slater continued “We
are grateful for the determined bi-partisan Congressional effort
that sought a deeper, fair and unbiased review of the Project’s
proposed use of the right-of-way by BLM and are tremendously
satisfied to finally have this matter resolved.”
The BLM Letter follows multiple requests from bi-partisan
congressional representatives and a broad coalition of national
labor organizations, water districts, railroads, rural communities,
farmers and numerous stakeholders that have urged congressional
action to clarify the scope of railroad rights-of-way over federal
lands and criticized BLM’s October 2015 evaluation of the Cadiz
Water Project for its lack of consistency with historic policy
encouraging co-location of infrastructure in railroad
rights-of-way. The October 2015 evaluation not only impeded
the Cadiz Water Project, but also set a troubling precedent for
thousands of miles of existing uses of railroad rights-of-way in
the West.
BLM revisited the October 2015 evaluation relying on a recently
issued Memorandum Opinion by the US Department of the Interior
Solicitor’s Office and recent case law and concluded that
“authorizing the proposed activity falls within the scope of rights
granted to the Arizona and California Railroad (ARZC) under the
General Railroad Right-of-Way Act of March 3, 1875 (1875 Act), and
therefore does not require authorization by BLM.”
The BLM Letter also separately finds that the Project furthers
railroad purposes, following a factual review of the railroad
benefits of the Project: “As the railroad itself describes, these
component elements of the Cadiz project all provide critical
benefits to the railroad that facilitate elements of its
operations. Accordingly, consistent with the incidental use
doctrine, the benefits associated with the Cadiz Project further a
railroad purpose.”
To view a copy of the letter, click
HERE: http://www.globenewswire.com/NewsRoom/AttachmentNg/ac83ded0-3b9c-4cce-9d9c-e3031e625a62
With the receipt of this definitive determination by the BLM,
the Company will now turn its attention to final engineering
design, contract arrangements with its participating agencies and a
conveyance agreement with the Metropolitan Water District of
Southern California in accordance with applicable law.
Background
The BLM Letter arrives following interaction over nearly a
decade with the US Department of the Interior (“DOI”) regarding the
proposed use of the ARZC to co-locate the Project’s conveyance
pipeline while constructing necessary and related improvements for
the railroad. In 2008, Cadiz entered a 99-year lease with the ARZC
to utilize the right-of-way for the Project’s water pipeline and
also agreed to provide necessary railroad improvements. In January
2009, DOI determined that the Project could proceed within the
right-of-way without additional federal permits and was within the
scope of the ARZC right-of-way. BLM policies and
appropriations language authored by Sen. Dianne Feinstein (D-CA)
subsequently created a unique requirement for the Project to
demonstrate that it “further railroad purposes, at least in part,”
and was therefore within the scope of the
right-of-way.
In response to submittals offered by Cadiz, SMWD and ARZC over
several years, the former Director of the BLM California office
mailed a letter to Cadiz in October 2015, which reversed DOI’s
January 2009 opinion, rejected the judgement of the railroad as to
critical railroad benefits, and concluded that the Project was
outside the scope of the right-of-way. BLM California reached
this conclusion even though elements of the Project furthered
railroad purposes. To reach its conclusions, the October 2015
evaluation applied a new standard that the pipeline and railroad
benefits must “originate” from a railroad purpose. This new
standard, however, was inconsistent with the then-applicable
Memorandum Opinion, controlling law, and evaluations for existing
infrastructure within the thousands of miles of railroad rights of
way throughout the West. Consequently, the 2015 evaluation
clouded thousands of third party rights and railroad uses within
railroad rights-of-way in the Western United States. If the
2015 evaluation were universally applied, other third party uses
could require retroactive and future supplemental permitting from
the federal government, despite more than 100 years of historic
practice to the contrary in the West.
Almost immediately following BLM’s controversial 2015 evaluation
it was subject to bi-partisan criticism and heightened scrutiny by
lawmakers. Subsequent responses by the BLM to Freedom of
Information Act (“FOIA”) requests revealed that BLM officials who
reviewed the Project may have been biased in their analysis and
communicated details on the timing and outcome of the review to
people with ties to the Wall Street investment community. In
2016, the US Department of the Interior Inspector General and the
US House Oversight Committee launched investigations into the
activities of third parties and conduct of the BLM, but have not
yet issued their findings. We continue to look forward to the
conclusion of those investigations.
About the Cadiz Water
Project
The Cadiz Valley Water Conservation, Recovery
and Storage Project is an innovative, California water project that
will create a new water supply for approximately 400,000 people by
conserving renewable groundwater presently lost to evaporation at
the base of a vast Mojave Desert watershed. The Project is a
public–private partnership between Cadiz Inc., the largest private
landowner in the area, and public water providers in Southern
California to provide a new, reliable water supply of 50,000
acre-feet per year for 50 years across the region without harm to
the environment. Operations will be governed by an extensive,
state-of-the-art groundwater management plan imposed and enforced
by San Bernardino County. The Project has been extensively studied,
publicly-reviewed and approved under California’s stringent
environmental laws and the Project’s permits have been upheld in
California’s court system. In addition to adding a new reliable
water supply in Southern California, Project construction is
expected to create and support thousands of jobs and generate close
to $1 Billion in economic activity. Over the long-term, the Project
will create $6 billion in savings for water users throughout
Southern California.
About Cadiz
Founded in 1983, Cadiz Inc. is a publicly-held
renewable resources company that owns 70 square miles of property
with significant water resources in Southern California. The
Company maintains an organic agricultural development in the Cadiz
Valley of eastern San Bernardino County, California and is
partnering with public water agencies to implement the Cadiz Water
Project, which over two phases will create a new water supply for
approximately 400,000 people and make available up to 1 million
acre-feet of new groundwater storage capacity for the region.
Cadiz abides by a wide-ranging “Green Compact” focused on
environmental conservation and sustainable practices to manage its
land, water and agricultural resources. For more information,
please visit www.cadizinc.com
FORWARD LOOKING STATEMENT: This release contains
forward-looking statements that are subject to significant risks
and uncertainties, including statements related to the future
operating and financial performance of the Company and the
financing activities of the Company. Although the Company
believes that the expectations reflected in our forward-looking
statements are reasonable, it can give no assurance that such
expectations will prove to be correct. Factors that could
cause actual results or events to differ materially from those
reflected in the Company’s forward-looking statements include the
Company’s ability to maximize value for Cadiz land and water
resources, the Company’s ability to obtain new financing as needed,
the receipt of additional permits for the water project and other
factors and considerations detailed in the Company’s Securities and
Exchange Commission filings.
Contact:
Courtney Degener
213.271.1603
cdegener@cadizinc.com
Cadiz (NASDAQ:CDZI)
Historical Stock Chart
From Mar 2024 to Apr 2024
Cadiz (NASDAQ:CDZI)
Historical Stock Chart
From Apr 2023 to Apr 2024