In the storied history of Western water wrangling, Los Angeles’ turn-of-the-20th-century water grab from the agricultural Owens Valley — popularized in the 1974 film Chinatown — is unrivaled. The heist was a smashing success, and it inspired a century of audacious schemes by other would-be water barons.
Among them were Ed and Lee Bass, two Texans who had made their fortunes in the oil business and, in the early 1990s, quietly began buying farms in southeast California’s Imperial Valley. Eventually, they assembled a 42,000-acre spread called Western Farms. But the Basses weren’t getting in the farming business; they were trying to amass rights to vast amounts of irrigation water, drawn from the Colorado River, which they planned to sell to San Diego. (San Diego, in turn, was trying to free itself from dependence on Los Angeles’ Metropolitan Water District.) To a lot of folks in the Imperial Valley, the Bass brothers’ scheme sounded like Chinatown all over again.
"I didn’t think that foreigners should come in and buy up property and sell the water off and dry up the community," says Don Cox, a former member of the Imperial Irrigation District board, who rallied the fight against the Basses in 1996. There were cries of conspiracy, and allegations that the Bass brothers were stacking the district’s board. The board and many of the valley’s farmers fought back, and it was ultimately determined that the water rights in the Imperial Valley lay with the district, not individual landowners. Only the district could sell the water elsewhere, and the Bass brothers’ scheme fell flat. The brothers sold out and moved on.
Nothing much more was said about Western Farms until this February, when news broke that the land has a new owner: The Imperial Irrigation District, which will send at least some of the farms’ water to San Diego. Eight years after the Bass brothers hatched their plan, their nemesis is turning their dream into reality.
The reality of the Imperial Irrigation District’s world rapidly changed in the wake of the Bass brothers’ arrival on the scene. As water supplies became increasingly tight in the 1990s, other Colorado River users pushed the district — which has rights to a fifth of all the water in the river, but is a notoriously inefficient user of water — to tighten its belt, and transfer some of its water to San Diego’s urbanites. Finally, in 2003, under intense pressure from the federal government, the district agreed to sell 200,000 acre-feet to the city for $50 million a year (HCN, 9/16/02: The Royal Squeeze).
Under the terms of the deal, the district will — for the first 15 years of what could be a 75-year transfer — recruit farmers to temporarily fallow their fields, thereby making water available for San Diego. But scraping together the water was difficult last year.
"We didn’t get all the responses we needed until the last day," says Andy Horne, an irrigation district board member. "That got some of us thinking that, rather than having to go through this same process over and over again during this first 15-year program, it might be easier just to acquire (Western Farms) and have that flexibility of being able to generate the water ourselves if we had to."
Meanwhile, the water-treatment giant USFilter, which bought the land from the Basses in 1997, was angling to get out of the water-marketing business. Saddled with massive debt, USFilter’s parent company, Veolia Environnement, parted out Western Farms for $77 million — at least $133 million less than USFilter paid for the land.
"We took a big haircut," says Andy Seidel, USFilter’s CEO. But, he adds, "It’s never good for a company that has shareholders to be involved in what is essentially a public asset."
"It’s ironic that something that was originally bought one piece at a time and amassed to create an adverse situation has now been purchased by the agency that fought to keep that from happening," admits Bruce Kuhn, the president of Imperial’s board of directors. "Did we ever think it would happen? No."
A whodunit ... almost
For those who fancy a last dash of intrigue with this water deal, there’s one other spicy rumor floating around the valley. This one holds that Imperial purchased Western Farms to fend off the predations of — what else? — Los Angeles.
Kuhn says that when he read in the San Diego newspaper that Western Farms was for sale, he found himself suddenly wondering if the Metropolitan Water District "wasn’t going to try to be mischievous."
The Met is beneath Imperial in the Colorado River hierarchy. But if Met had bought Western Farms and fallowed the property, it could — at least in theory — have watched that unused water flow on down the line, and taken it without paying Imperial a dime. That would have been a plot twist worthy of a sequel to Chinatown.
The author is HCN associate editor.