Laserfiche WebLink
VALUATION OF SKYLARK RANCH WATER RIGHTS <br /> December 2019 <br /> 4.0 VALUATION <br /> The market value of a water right is the amount for which the right would be bought <br /> and sold on the open market, assuming knowledgeable buyers and sellers conducting <br /> the transaction at arm's length. The best measures of market value are recent water <br /> right sales or leases in the same geographical neighborhood as the Skylark Ranch Water <br /> Rights ("comparables"). Water right values are typically expressed in terms of value per <br /> acre-foot of average annual consumptive use yield. Comparables are evaluated as to <br /> their applicability to the subject rights, and adjustments are made to the values as <br /> necessary to reflect characteristics of the subject rights. <br /> The value of a water right is affected by a number of factors, including the seniority of <br /> the right, dry year and average year yields, location, season of use, amount of water <br /> involved in the sale, whether or not storage is included, and the degree of competition <br /> in the market place. The unpredictable vagaries of the water market are also prominent <br /> in water right values. These vagaries include market transactions that are higher or <br /> lower than expected for various known or unknown reasons, including an overly <br /> motivated buyer or seller or a poorly negotiated transaction. The highest and best use <br /> of the Skylark Ranch Water Rights, from a valuation standpoint, is for municipal or <br /> industrial use. The most likely market for the subject rights is the upper Colorado River <br /> basin. <br /> 4.1 Comparable Water Right Sales and Leases <br /> Although there have been a number of comparable water right sales and leases in the <br /> neighborhood of the subject rights, the market is not as active as other areas in <br /> Colorado; for example, along the Front Range in the South Platte River basin. The <br /> following summarizes the comparable water right sales and leases that were identified <br /> and used in this valuation. The values and locations of the comparables are summarized <br /> in Table 4-1 and Figure 4-1. <br /> Calculations of the water values discussed herein were carried out to the nearest dollar. <br /> This is done for computational continuity, and does not imply accuracy to the nearest <br /> dollar. <br /> 4.1.1 Columbine Ditch <br /> In 2009, the City of Aurora and Climax Molybdenum Company purchased the Columbine <br /> Ditch water right from the Board of Water Works of Pueblo (Pueblo) for $30.23 million. <br /> Aurora reportedly owns two-thirds of the water right and Climax owns one third. The <br /> Columbine Ditch is a transbasin diversion from the headwaters of the Eagle River in the <br /> Spronk Water Engineers,Inc. Page 1 6 <br />