09 Sep News: Cadiz Signs Letters of Intent with Additional Central Valley Farmers
9-8-14- Los Angeles – Cadiz Inc. (“Cadiz”, the “Company”) reported today that it has executed additional Letters of Intent (“LOI”) with three farming interests in California’s Central Valley, reserving 6,000 acre-feet of water from the Cadiz Valley Water Conservation, Recovery & Storage Project (“Cadiz Project”). The farming interests Double D Farms, Cottonwood Farms, Inc., and MP Farms are located within the Westlands Water District, one of the Central Valley’s largest water providers whose local and imported supplies have been challenged by the historic drought and ongoing regulatory restrictions to the State’s water deliveries.
“The Cadiz Project is uniquely situated to provide assistance to the Central Valley and we are pleased to have the opportunity to meet the needs of these farms in addition to the farmers within the San Luis Water District with whom we’ve also entered into an LOI,” said Cadiz CEO Scott Slater.
To receive water from the Cadiz Project, the three farms would join the Project through an assignment of rights to or the formation of a public water supply company, yet to be determined. The farms would also require an exchange agreement with a State Water Project contractor. Under the terms of the LOIs, the farms could enter into a definitive agreement while the exchange arrangements are evaluated and any additional regulatory compliance is completed. Cadiz will receive $960 per acre-foot for water supplies delivered to the three farms. However, costs to the farmers may be reduced by off-setting contributions provided by third parties in exchange for benefits conferred.
As previously announced, the Company has executed LOIs and option agreements that are in excess of Project capacity and plans to continue to pursue additional LOIs with public water suppliers consistent with all Project approvals. To account for any oversubscription, participation in the Project would be prioritized in definitive agreements as required.
The Project received key approvals under the California Environmental Quality Act (“CEQA”) in 2012. Santa Margarita Water District, the CEQA lead agency, certified the Final Environmental Impact Report and executed a Purchase & Sale agreement in July 2012. San Bernardino County, a CEQA responsible agency, issued approval of the Project under its Desert Groundwater Ordinance in October 2012. The Project approvals were recently upheld against legal challenges.