03 Jul Press Release: Cadiz Inc. And Limoneira Company Announce New Agriculture Development Agreement
July 2, 2013
Contact – Cadiz Inc, Courtney Degener/Limoneira Company, John Mills
Los Angeles, CA — Cadiz Inc. (NASDAQ: CDZI) (“Cadiz”) and Limoneira Company (NASDAQ: LMNR) (“Limoneira”) are pleased to announce today that they have entered into a long-term lease agreement (the “Agreement”) to develop new lemon orchards on Cadiz’s agricultural property in eastern San Bernardino County, California (the “Cadiz Ranch”). Under the terms of the Agreement, Limoneira has secured the right to plant up to 1,280 acres of lemons over the next five years at the Cadiz Ranch operations in the Cadiz Valley. The arrangement provides a new growing, packing, and marketing opportunity that is complimentary to Limoneira’s existing production and furthers Cadiz’s commitment to the sustainable development of its Cadiz Valley property.
The Agreement provides that Limoneira will initially plant 320 acres of lemons at the Cadiz Ranch and will also hold options to plant up to 960 additional acres by 2018. Cadiz will provide Limoneira access to water at the property to irrigate its farmed acreage according to sustainable agricultural practices. All leased property will be located in the Cadiz Valley on land that offers farming and water supply infrastructure, but is currently unplanted. As a result of the Agreement, the vast majority of previously cultivated land at the Cadiz Ranch could return to active farming.
“This new lease arrangement continues our commitment to sustainable agriculture in the Cadiz Valley and offers the company and the local economy positive farming opportunities that can be developed in cooperation with our existing plans for the Cadiz Valley,” said Tim Shaheen, CEO of Cadiz Real Estate LLC, a wholly-owned subsidiary of Cadiz. “Limoneira is a leading grower and marketer of lemons and adheres to best agricultural practices throughout its operations, making it an ideal partner for Cadiz.”
In consideration for the lease arrangement, Limoneira will provide Cadiz an annual rental payment and water supply payment. The rental payment will include a base rent of $200 per planted acre and a lease payment equal to 20% of net cash flow from the harvested crops grown on Cadiz property. The annual rental payment will not exceed a total of $1,200 per acre. The Agreement also provides a tag right for Limoneira to redirect water that would otherwise be used for lemons on its leased acreage to a 500 acre-foot participation right in the Cadiz Valley Water Conservation, Recovery and Storage Project (the “Water Project”), which was approved last year.
”We are very excited to partner with Cadiz and leverage our core competencies to develop new lemon orchards on its agricultural property,” stated Harold Edwards, President and Chief Executive Officer of Limoneira. “Integrating this property into Limoneira’s portfolio of high quality agricultural properties represents another significant growth milestone for our 120 year old company. We expect to begin generating revenue from the first phase of 320 acres of lemons in 2018.
Mr. Edwards continued, “This agreement represents an important component of our global growth strategy to expand our productive agriculture acreage and leverage our expertise and existing infrastructure to drive top- line growth and increase our profitability.”
In the Cadiz Valley, 9,600 acres is currently zoned for agricultural development and Cadiz has developed a total of 1,920 acres of its property for agricultural operations. Currently, the property has approximately 600 acres of grapes and lemons under cultivation. All crops are cultivated following sustainable agricultural practices and irrigated in accordance with monitoring provisions overseen by the County of San Bernardino. Limoneira’s new plantings and groundwater use will comply with Cadiz’s existing groundwater and land use approvals and abide by the County-approved groundwater management plan for the Water Project, once it becomes operational.
About Cadiz Inc.
Founded in 1983, Cadiz Inc. is a publicly-held land and water resource development company that owns 70 square miles of property with significant water resources in eastern San Bernardino County, California. The Company is engaged in a combination of organic farming and water supply and storage projects, including the Cadiz Valley Water Conservation, Recovery & Storage Project which will deliver a new, reliable water supply throughout Southern California. Cadiz abides by a wide-ranging “Green Compact” focused on environmental conservation and sustainable management practices at its properties. For more information about Cadiz, visit www.cadizinc.com.
About Limoneira Company
Limoneira Company, a 120-year-old international agribusiness headquartered in Santa Paula, California, has grown to become one of the premier integrated agribusinesses in the world. Limoneira (pronounced lē mon΄âra), is a dedicated sustainability company with approximately 8,000 acres of rich agricultural lands, real estate properties and water rights in California. The Company is a leading producer of lemons, avocados, oranges, specialty citrus and other crops that are enjoyed throughout the world. For more about Limoneira Company, visit www.limoneira.com.
John Mills, Senior Managing Director