Located in the Sonoran desert, close to the Arizona-California border, is the small, rural city of Cibola—home to about 300 people, depending on the season. Life here depends almost exclusively on the Colorado River, which feeds thirsty crops such as cotton and alfalfa, supports nearby wildlife refuges, and allows visitors to enjoy boats and other recreational activities.
It is a place that few Americans are likely to have heard of, making it more surprising when the investment firm Greenstone Management Partners bought almost 500 acres of land here.
On its website, Greenstone says that it is “committed to pushing for water deals that are beneficial for the public good as well as for private industry.”
But critics charge Greenstone—an affiliate of MassMutual, an east coast financial services conglomerate—is trying to make money from the most valuable and finite of resources in Cibola: water.
And that comes at a time when Arizona’s share of the Colorado River is being cut in a multi-decade megadrought.
“These companies aren’t buying up plots of land because they want to farm here and be a part of the community, they’re buying up land here for the water rights,” said Holly Irwin, a Cibola resident and La Paz County district supervisor.
Those water rights may soon come to the advantage of Queen Creek, Ariz., a growing Phoenix suburb some 200 miles away. The city approved the $27 million purchase of Colorado River water last September from the Greenstones properties in Cibola, although that agreement is now mired in litigation brought by La Paz, Mohave and Yuma counties against the Federal Bureau of Reclamation over its approval of the water transfers.
The Bureau of Reclamation has turned over any questions about the lawsuit to the Justice Department, which did not respond to CNN’s requests for comment. After hearing arguments Wednesday from county attorneys and the Department of Justices attorneys, U.S. District Judge Michael Liburdi said he would rule on the suit at the end of April.
“Greenstone is going to make millions at the expense of what it’s going to do to our communities in the future and the precedence it’s going to set,” said Irwin. “We are in the midst of an extreme drought, our communities need this water. At some point, the state has a responsibility to protect the people that are here and to protect our water and not cater to those that are buying property for the water rights to make millions off of it to benefit metropolitan areas.”
In nearby Mohave County, Supervisor Travis Lingenfelter described what he saw as a fight over the Colorado River communities future, adding a slew of east coast investment firms were trying to jump into the case. And it is not just in Arizona. East coast companies have bought up thousands of acres of irrigation land throughout the Southwest, local officials told CNN.
Water Asset Management, a New York-based investment firm, has emerged as one of the biggest players in the space, with purchases in Arizona, California, Colorado and Nevada, as well as deals in the works in New Mexico and Texas. Water Asset Management has at least 3,000 acres in western Colorado’s Grand Valley, which Mueller has worked to secure for Colorado’s share of the river.
Greenstone attorney Grady Gammage told CNN in a statement that its “proposal was recommended for approval by the Arizona Department of Water Resources after extensive hearing and comment” and “has no impact on the potential of cities along the river to grow.
“As property owners, my clients hold a water right,” Gammage said. “This is the same as all the farmers along the river, who hold land that has been irrigated, in most cases for over 100 years. That water right is valuable property, which can be transferred. It’s like buying and selling land, except that, Colorado River water can only be transferred if it goes through an extensive review process at both the State and Federal Levels. Any proposed transfer is independently analyzed.”
The full extent of land grabbing is hard to track, she said, because investment firms use a variety of names to mask ownership. The investment firms did not respond to CNN’s questions about allegations that they have hidden their ownership of land using names other than Water Asset Management.
In property searches of the Mohave County and Mesa counties property assessment websites in Colorado, no results were found when CNN searched for properties listed with Water Asset Managements name.
NN found several properties in both counties under various names, such as WPI Hulet Farm AZ LLC, WPI II-GV6 Farm CO LLC, and WPI-919 Farm AZ LLC, all with a mailing address matching that of Water Asset Managements corporate headquarters in New York.
“Water Asset Management is proud of our investments in production agriculture and water in the American West,” company COO Marc Robert told CNN via email. “In the face of record shortages on the Colorado River, we have voluntarily answered urgent and repeated calls to conserve water. Moreover, we will continue to manage our assets in a manner that contributes to solutions to water scarcity and work actively to promote conservation.”
Under a pilot program, the federal government has set aside $125 million of drought-relief funds to pay Colorado River farmers and ranchers to conserve water by foreclosing their lands. The feds are also poised to provide more money for short-term fallowing. Some worry outside investment firms might make money off of a scheme like this.
Donovan now runs his family’s 400-acre Copper Bar Ranch, raising high-country cattle alongside his husband and two dogs. Like other farmers and ranchers across the state, she worries about Wall Street’s impact on their future.
Andy Mueller, the general manager of the Colorado River District Water District, argues Water Asset Management and other East Coast investment firms as “drought profiteers.”
“They’re trying to suck the very lifeblood out of these communities for their own financial benefit,” Mueller said.
