Last week, the Company received a letter from the California State Lands Commission (“State Lands”) regarding the Cadiz Groundwater Storage and Dry-Year Supply Program (“2002 Cadiz Program”), a project we pursued in partnership with the Metropolitan Water District of Southern California from 1997-2002. The letter informs the Company that the State of California owns property that would have been crossed by the 2002 Cadiz Program’s pipeline route. On Sunday evening, the Los Angeles Times reported on the letter after having received it from unidentified sources. The letter communicates that a lease would be required to cross property owned by the State of California.  According to the letter, such a lease would be subject to the approval of the Commission and such approval may require additional environmental review in accordance with CEQA.

The State Lands letter does not discuss the current Cadiz Valley Water Conservation, Recovery & Storage Project (“Cadiz Water Project”), which plans to construct its pipeline within an existing railroad right-of-way and was fully reviewed in accordance with the California Environmental Quality Act (CEQA) starting in 2011.  It refers to the 2002 Project even though State Lands was notified of the 2011 Cadiz Water Project’s CEQA process, as were over 100 state, federal, local and regional agencies, yet, unlike countless agencies that did comment, State Lands did not.  Moreover, they did not assert any role as a responsible agency over the Cadiz Water Project, nor participate in the numerous workshops that were open to the public and all agencies. The CEQA review for the Cadiz Water Project was fully certified and then upheld by the California Court of Appeal in 2016. The EIR is final and conclusive on all parties properly notified. The Statute of Limitations to challenge the EIR has passed.

The State Lands letter notes that a parcel, which is approximately 200 feet wide and one-mile long and may have been crossed by the 2002 Cadiz Program, is owned by the State and may require a lease to be crossed.   The State Lands in question are not material to our ability to complete the Cadiz Water Project.

As we have stated, the Company’s attention is focused on securing a withdrawal of the controversial evaluation by the BLM California office in 2015 of our planned use of the railroad right-of-way.  The 2015 BLM evaluation was contrary to law and policy and has been under investigation since 2016 when it was revealed that the BLM’s review was potentially tainted by the disclosure of communications between BLM employees and people that might profit from trading of the Company’s securities. Various stakeholders, a bi-partisan group of Congressional members and the Company have supported a reversal of the 2015 BLM evaluation on the merits since its issuance.

The Company is confident we will ultimately receive validation of our position that the Project is within the scope of the right-of-way.   We look forward to providing clean and reliable water to 400,000 Californians as soon as possible.

A copy of the letter from State Lands is available here.

A copy of a second clarifying letter from SLC is here

A copy of a letter sent from Cadiz to the SLC is here