Wednesday, April 15, 1998 | 9:59 a.m.
If the Southern Nevada Water Authority votes Thursday to spend $25 million for groundwater rights in Coyote Springs, an investor-owned property in northern Clark County, no one is certain how the water will come to Las Vegas.
Coyote Springs is 60 miles due north of Las Vegas, near the Lincoln County border.
One solution would be to pump the water 35 miles into the Muddy or Virgin rivers, which flow into the Colorado River, which provides most of Southern Nevada's water. This would allow Southern Nevada extra water from the Colorado in an amount equal to that which is pumped into the Muddy and Virgin rivers.
That solution, however, is illegal under current federal law. The Law of the River, passed by Congress in the 1920s, prohibits the pumping of groundwater -- a process known as water wheeling -- into the Colorado. Southern Nevada water authorities have been intensely lobbying in recent years for changes to the law. Any change would require approval from all seven states that depend on the Colorado for their water, including California and Arizona.
Another solution would be for the Southern Nevada Water Authority to build a pipeline from Coyote Springs to Las Vegas, projected to cost $25 million. This would require an expensive and time-consuming environmental impact statement, even though there are no towns between Las Vegas and Coyote Springs. Threatened and endangered species top the list of environmental concerns in the event a pipeline is proposed.
Coyote Springs Investments Limited Liability Co., represented by Nevada's largest law firm -- Lionel, Sawyer & Collins -- is in the process of purchasing the 42,000-acre Coyote Springs property that has the groundwater rights. The site, developed in the 1970s as a possible site for the federal government's MX missile project that never materialized, holds at least 7,500 acre feet of groundwater, according to the state engineer's office.
The investment company -- which lists gaming lobbyist Harvey Whittemore as an owner -- -- is purchasing the land from Aerojet General Corp., a U.S. defense contractor that swapped Florida Everglades parcels for Bureau of Land Management acres in Nevada during the 1980s. Aeroject had planned to use the property to test jet engines.
Aerojet has water rights for 8,680 acre feet in Coyote Springs. Nevada Power Co. also owns the rights to 5,000 acre feet in the area, having purchased them in the 1970s for use with a power plant it had contemplated.
An acre-foot of water can serve a family of five up to a year.
If the Coyote Springs partners are successful in purchasing the land, and if they ultimately negotiate the sale of the groundwater rights to the Southern Nevada Water Authority, the authority's first payment of $5.2 million would be due to the investment company at the close of escrow. The contract would last nine years.
In addition, the authority could get five acres of land and easements for roads and power lines.
Additional water from some source is a definite need within six years, when Nevada begins taking its full allotment of 300,000 acre feet a year from the Colorado River. Nevada is limited to that amount by the Law of the River, yet growth has virtually no limitations.
After 2030, projections show the community will need at total of another 87,000 acre feet, said Kay Brothers, the authority's resources director.
Biologist Larry Paulson, a former UNLV researcher, and environmental groups, questions why a Coyote Springs deal would be necessary. The Southern Nevada Water Authority is building a $1.7 billion pipeline from the Colorado to augment the existing water delivery system. Paulson and the environment groups argue that when this pipeline is finished, there will not be enough river water available to bring the system to capacity.
Therefore, they say, why is Southern Nevada looking to the rural areas when it can't even fulfill its present water delivery system?
Coyote Springs Investments LLC, incorporated in February, is one of four companies that own property in the Coyote Springs area. All four are represented by Lionel, Sawyer & Collins. The other companies are Coyote Springs Land Development Co. and Coyote Springs Water Co., both incorporated in July, and Coyote Springs LLC, incorporated last month.
A limited liability company can do business from out-of-state by filing a $325 filing fee with the secretary of state's office. The yearly renewal is $175. According to state law, the owners of LLCs are not required to disclose their identities on any papers of incorporation.
Limited liability company owners are also protected from personal liability and can receive tax benefits not available to unincorporated businesses.
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