20K ACRE NEBRASKA FARM ACQUIRED BY NATURAL RESOURCE DISTRICTS
Nov. 12, 2012
North Platte (NE) Bulletin reports:
The biggest crop farm in Lincoln County will become a water source for two of Nebraska's biggest rivers, officials said Thursday.
Four Natural Resource Districts in west-central and southwest Nebraska agreed to buy nearly 19,500 acres of farmland in southern Lincoln County for $83 million.
The crops will be idled, the land seeded to grass, and the irrigation water will be sent to the South Platte and Republican rivers.
The land, called Lincoln Farm, belongs to a group of investors in Delaware and was formerly owned by Don Oppliger. When the Delaware group bought the land in 2008, they paid $52 million - a leading price for farmland at the time, especially for sandy soils under water restrictions. The price was even more impressive because nearly one-third of the acres -- mostly the corners of quarter sections that pivot irrigaton systems don't reach -- have no irrigation.
In this deal, the set price is $83 million -- netting a 37 percent profit for the Delaware investors. That amounts to an average price of $4,256 an acre. The price is about $700,000 per irrigated quarter section, officials said.
The deal materialized during late September and early October. It was approved Thursday on an 8-2 vote of the Twin Platte NRD board of directors.
The water would help Nebraska meet legal obligations to other states and the federal government to pass water downstream and maintain wildlife along the rivers.
The cropland will probably be returned to grass. The NRDs plan to pipe water from the farm's irrigation wells to the Platte and Republican Rivers.
At least 25 percent of that water would go into the South Platte River, TPNRD General Manager Kent Miller said. Water from the rest of the land would be piped south to the Republican River basin. Depending on needs and obligations, the percentages could change from year-to-year, Miller said.
The Twin Platte and three natural resources districts in the Republican River Basin will form a new government agency that will own the land. The new agency will work out the details of sharing the water.
The board first considered the deal Oct. 11 behind closed doors, then voted 8-2 to negotiate to buy the property, agreeing to allocate up to $100 million for the deal. There was little public input. The Bulletin reported the development Wednesday at the request of area farmers. Only a handful of people attended the special meeting Thursday, most of whom had business interests in the deal.
At each meeting, board members Bob Peterson and Doug Stack voted no. Eric Hansen, Jim Meismer, Robert L. Petersen, Chairman Dennis Schilz, Joe Wahlgren, Jerry Weaver, John Williams and Bob Wiseman voted yes.
"This developed awfully fast," Stack said before voting no. "When something this big develops this fast, you're bound to run into problems."
On the other hand, Schilz said after the meeting that it is a real opportunity, allowing the TPNRD to add water to the Platte River without regulating everay water well in the district.
Jasper Fanning, general manager of the Upper Republican NRD, negotiated the deal with the Delaware investor group.
He said the land was for sale privately for $89 million, but the NRDs offered to buy the entire farm as a unit, so the sellers reduced the asking price.
Fanning said other buyers has shown significant interest in parts of the big farm, but not the entire unit.
Part of the $100 million would pay for up to 17 miles of pipeline to transport the water to each of the rivers.
The financing is yet to be arranged. The NRDs can back out of the deal by Nov. 2 if financing can't be arranged, but Miller said there should be no trouble.
The Twin Platte NRD's share of the cost is expected to be paid by a $4-6 tax on each irrigated acre in the Twin Platte district -- Lincoln, McPherson, Arthur and Keith counties.
Lincoln Farm also consists of a potato storage and shipping building on the outskirts of Wallace. Many of the farm's pivots were used to grow potatoes on the high sandy soil. Miller did not know what would happen to the potato storage building and the accompanying rail spur.
Miller said he needed to go out there and "what we've bought."
Some homes are in the farm, where farm workers lived. Fanning said their value would be maximized -- possibly rented or sold.
Water for valley
The purpose is "river flow enhancement related to the Platte River basin and the Republican River basin."
"There are 300,000 acres in the district," Miller said. "It makes more sense to affect a piece of land on the fringe of the district rather than to regulate every well."
"In some sense we have been working on this since 2004," he said. "We met with stakeholders on an integrated management plan in 2009, and they told us to keep the NRD out of (groundwater pumping) regulations."
Miller said the TPNRD has to add 7,700 acre-feet of water annually back into the Platte River, to offset water development that has occurred in the basin since 1997.
The offset is required under a statewide agreement that officials worked out over several months, according to the Legislature's bill 962.
Valuable location, commodity
The land is on the border of the watershed between the Republican Valley and the Platte Valley.
Miller said it's possible that irrigation water from half of that land would meet the NRD requirement of 7,700 acre-feet in the Platte River. And in some years, the Twin Platte NRD could get half the water, depending on needs in the Republican River.
Miller said there are other positives in the deal.
"This would be permanent water," he said. "And, the cost of water - and finding it - is considerable."