Scottsdale’s Planet Ranch a Costly Goof
Excerpt from Valley 101: A Slightly Skewed Guide to Living in Arizona, a collection of Clay Thompson’s columns for The Arizona Republic. (Originally published April 1, 2001.)
Q: We were exploring some back roads in western Arizona when we came to a locked gate with a sign reading, “Planet Ranch, City of Scottsdale.” What is Scottsdale doing in La Paz County?
A: Ah, Planet Ranch.We’d forgotten about that, and there probably are a lot of people in Scottsdale who wish they could forget about it, too. It is one of those “seemed like a good idea at the time” things, the type of thing, we must admit, that checkers the careers of many Valley 101 staff members.
In 1984, Scottsdale paid $11.7 million for the 171,141-acre Planet Ranch in order to gain the rights to water from the Bill Williams River. The idea was to build a pipeline to carry the river water to the Central Arizona Project Canal and thence to Scottsdale.
Scottsdale was not alone in this speculation. Mesa and Phoenix also bought “water farms,” and developers were abuzz with plans to buy up tracts of land and peddle the water rights to cities.
However, in a rare burst of cogent thinking, the Legislature realized these schemes could drain rural parts of the state of their water rights. So new laws were passed that sharply limited such enterprises, and the water-ranchers, most notably Scottsdale, were left holding the bag. Not a drop of the Bill Williams ever bedewed Scottsdale.
At the time, the rules required that to retain the water rights, the land had to be farmed, so Scottsdale went into the alfalfa business, with a notable lack of success. In 1993, the city spent $1.18 million on Planet Ranch and earned $626,341 selling alfalfa. This, as they say, is no way to run a railroad.
A few offers to buy the land have come and gone, and changes in the law have lifted the alfalfa bale from Scottsdale’s back, but the ranch remains a property of the city of the West’s Most Western City.
At just about the time the ranch got started, the bottom dropped out of the horse market – the Arabian horse market, in particular. Contributing factor: IRS rule changes that disallowed “hobby” horse farming as a tax deduction (a good thing). Arabian horse ranches in Scottsdale began moving out or shutting down, and the city offered no incentive keep them here because developers wanted the land they occupied and the city wanted that always-of-primary-importance tax revenue from it. By the early 1990s, there were fewer horses in the area. That meant fewer mouths to eat hay and hay-based products. That meant hay sales that were lower than anticipated by Planet Ranch. Those of us who had horses here in the Valley hoped for low hay prices from that “local” source. It never happened. You could buy Colorado hay for less than you could Planet Ranch hay. Throw in that new legislation that protected water rights (a good thing). The whole deal was in the wrong place at the wrong time and there were just way too many “bean counters” involved. IMO