From failed housing development to long-awaited groundwater bank, McAllister Ranch saga continues

More than 13 years after buying half of the 2,100-acre McAllister Ranch – a poster child of the 2007 housing crash – out of foreclosure for use as a groundwater bank, Rosedale-Rio Bravo Water Storage District agreed earlier this month to sell its remaining share to Buena Vista Water Storage District.

Buena Vista will buy this last section, about 297 acres, for $12.6 million, according to the agreement.

Rosedale-Rio Bravo and Buena Vista paid $11 million each in 2011 to buy the Ranch, which had been slated as a 6,000-home, high-end development complete with a Greg Norman-designed golf course before the housing market imploded. The ranch stretches along Panama Lane west of Buena Vista Road.

Over the years, Buena Vista has shelled out another $37 million to become the sole owner of the land, which could be used to bank up to 200,000 acre feet of water a year, according to the project’s 2022 draft environmental report.

That’s a lot of water in an era when groundwater has become ever more precious under the Sustainable Groundwater Management Act (SGMA).

But McAllister just didn’t pencil out for Rosedale-Rio Bravo, according to General Manager Dan Bartel.

When all the costs to buy, build, maintain and operate the bank were figured against how much water Rosedale-Rio Bravo anticipated from the project, it would have cost $1,612 per acre foot, according to a breakdown provided by Bartel.

“Rosedale has other project options that are much more cost effective than McAllister,” Bartel wrote in an email. “We are planning on using the proceeds to fund those SGMA-critical projects at a significant savings to our water users.”

Including the most recent sale, Rosedale-Rio Bravo has made $27 million selling its portions to Buena Vista. After subtracting the initial $11 million outlay plus development and holding expenses, Bartel said the net for Rosedale-Rio Bravo is $14 million.

Bartel listed a number of other projects that Rosedale-Rio Bravo feels will be more cost-effective than McAllister, including its controversial Onyx Ranch project, which anticipates bringing water from the South Fork of the Kern River through Lake Isabella to farming fields northwest of Bakersfield. That project has been besieged by lawsuits from other Kern River rights owners who also have storage rights in Isabella.

For Buena-Vista, banking water at McAllister makes more sense, said Buena Vista’s General Manager Tim Ashlock.

“BV would have a much higher annual usage number,” Ashlock wrote in an email of the amount of water it anticipates banking and retrieving each year. The project would also allow other entities to bank water for a fee, according to the draft environmental documents.

Though the final environmental review is still ongoing, Buena Vista was able to bank about 21,000 acre feet on a section of McAllister last year under Governor Gavin Newsom’s executive order that temporarily lifted permitting requirements for the capture of flood water.

Since that order expired, not much has been happening on the ranch, Ashlock said.

The conversion from planned housing development to groundwater bank wasn’t exactly smooth.

The City of Bakersfield initially balked at allowing the transition, which meant less in property taxes and fees for the city. The city was also concerned that McAllister would be used to store and then sell Kern River water out of the county. A lawsuit by the city was eventually stayed with an agreement to have the city act as the lead environmental agency.

Then Buena Vista and Rosedale-Rio Bravo sued each other in 2017 with Buena Vista trying to force a sale and Rosedale-Rio Bravo asking a judge to split the property. Those hurdles were apparently cleared with the various sales.