Those certificates are still valid, but Hughes Corporation does not have access to supply water to the remaining 34,000 acres — more than 90 percent of its property. The Department of Water Resources has put the Hassayampa Basin off limits to new development while it studies how much water the underground reserve actually holds.
Water supply options for Teravalis include tapping another aquifer and delivering water by pipeline. It could also lease water from one of Arizona’s Native American tribes that have extensive water rights.
Developers also could buy rights to Colorado River water. Queen Creek, a Phoenix suburb, secured state permission and is preparing to spend $27 million to draw from the river nearly 750 million gallons for its 66,000 residents.
The adage in the West that “water runs uphill to money” applies. This year, Arizona lawmakers approved a $1 billion, three-year appropriation, essentially a down payment to secure stable water supplies.
“We’re at the very start of a new era of innovation and investment,” said Greg Vogel, founder and chief executive of Land Advisors Organization, a national brokerage and development consultancy in Scottsdale. “Teravalis will be in the making for 50 years, maybe 70 years, until buildout. They’ll have enough water.”
By no means, though, is that a consensus view.
The City of Buckeye, where Teravalis is, uses nearly 3.5 billion gallons annually for its 115,000 residents. Water consumption by Teravalis’s 300,000 residents could amount to three times that.
In 1980, Arizona enacted a groundwater conservation law that requires developers in the Phoenix metropolitan region to assure buyers that their homes and businesses have a 100-year water supply. The law also requires developers to replenish aquifers with the same amount of water that they withdraw.
Bruce Babbitt, a former governor of Arizona who signed the 1980 groundwater law while in office, said Teravalis would not meet either requirement. “My conclusion, based on a lot of analysis, is the project is not viable on the scale they are talking about,” he said.