Nestle water deal rained down cash on key Chaffee County locals

August 12, 2010

The Nestle corporation plan to tap the Arkansas River Basin in Chaffee County for its “Arrowhead Springs” mineral water product will make the company hefty profits. Unsurprisingly, the deal has already generated significant cash for a small group of locals involved in the controversial enterprise.

Early to cash in was Frank McMurry, who back in May 2007 sold Nestle 111 acres for $860,000, even though the land, known as Big Horn Springs, is not being used by Nestle. The company had originally planned to bottle some water from this site but environmental concerns ultimately convinced the company to withdraw this site from their permit. The company has made a verbal promise to place a conservation easement on the property.

McMurry is a former Chaffee County Commissioner, a member of the committee that OKd the Nestle deal.

In December 2009, Steve Hansen, owner of Gunsmoke Liquor, sold his store and 1.41 acres in Johnson Village to Nestle for $1,120,000. Nestle tore down the store to build its loading station, where it will fill trucks bound for Denver. Hansen retains the liquor license and is expected to rebuild.

A day after Hansen sold to Nestle, Harold and Mary Hagen hit the jackpot, selling 11 acres to the company for $2,850,000. The former Hagen property is the site of the springs that Nestle is tapping– the Ruby Mountain Spring and onetime Hagen Fish Hatchery. Since the Hagens were unable to sell Nestle sufficient water rights for its purposes, Nestle had to look elsewhere to augment its source.

In Colorado, where water supplies fluctuate wildly with the seasons, water-use permits like the one Nestle secured force holders to include a plan on how they will replace the water they will extract. In this case, Nestle failed to convince the Upper Arkansas Water Conservancy District to lease the company water and so it turned to the city of Aurora, 100 miles away.

Aurora took up the deal, agreeing to lease the company 65 million gallons of water per year for 10 years, with an optional 10-year renewal. The first year payment is $160,000. The price will rise 5 percent a year. Aurora can cut the deal off in any year that it needs the water for its own purposes.

In Salida, the deal has sparked strong opposition from the time it was proposed. Signs cropped up early last year around town as negotiations got underway that read “Stop Nestle” an “Nest-Leave.”

Shortly after the last of the land deals surrounding the Nestle project were completed, John Graham, an activist with Chaffee Citizens for Sustainability, wrote a letter to the local paper. He concludes: “I think I now understand a little better why a small but influential group of people were pushing so hard for approval of the Nestle project.”

Aurora City Councilman Ryan Frazier—now the GOP candidate for Congress in the 7th District, running against incumbent Democrat Ed Perlmutter—voted against the Nestle water deal, saying at the time that he wasn’t sure it was appropriate for the city to stick its nose in Chaffee County business.