Diablo Grande changes course

Garth Stapley, Modesto Bee, California, 2 May 2000

Diablo Grande developers have abandoned their only viable, potentially permanent water source approved by a judge -- but hope to substitute a dependable source in its place.

The first construction phase of the resort, in the arid Diablo Range southwest of Patterson, stalled last year when environmental groups filed a lawsuit challenging Diablo Grande's lack of water.

The project appeared to be getting back on track in October, however, when the judge reconsidered, partly because the resort's plan to buy water from the Berrenda-Mesa Water District appeared solid.

The latest twist has Berrenda-Mesa backing out and the much larger Kern County Water Agency stepping in. The latter oversees state water project contracts for 13 districts in Kern County, including Berrenda-Mesa.

The switch is necessary because the proposed contract with Berrenda-Mesa proved to be rather slippery, explained Kern County Water Agency resources manager Gary Bucher. His agency will provide flows not earmarked for state water project contractors, something that was snagging the Diablo Grande sale for Berrenda-Mesa.

Swapping one for the other would change neither the amount of water to flow to the resort nor the price -- $8 million for 8,000 acre-feet per year.

Diablo Grande and the Kern County Water Agency agree on the basics of the contract, but probably won't hammer out details before June, Bucher said.

Diablo Grande development coordinator Keith Schneider referred questions about the water deal to the resort's local lawyer, Russ Newman. Newman said he expects no problems with the deal and believes construction should begin soon after it is approved, which he thinks will be by the end of June. The hotel and winery should be finished by the end of the year, Newman added.

Construction on a large resort hotel can't get under way until the deal is signed.

Also depending on the water transfer are future shops, restaurants, a winery, tennis club, spa and 313 homes that developers hope to add to two existing golf courses and a vineyard on 2,300 acres.

Owners hope the resort eventually will cover nearly 30,000 acres, with four more golf courses, a wilderness center, research campus, offices and thousands of upscale homes in five villages. All the elements depend on securing more water rights.

Steve Burke, whose Protect Our Water group joined with state and local Farm Bureaus in the lawsuit challenging Diablo Grande's then-unidentified water sources, said resort backers have yet to pass environmental muster required by the state.

Also, Burke said, it's unclear whether Kern County Water Agency legally can be substituted for Berrenda-Mesa -- the provider approved by Stanislaus County Superior Court Judge Donald E. Shaver.

Protect Our Water has appealed Shaver's blessing of the Berrenda-Mesa deal, while resort owners have appealed Shaver's ruling requiring more proof of a long-term water source before construction beyond the first phase can occur.

The Kern County Water Agency in 1994 received approval to sell 130,000 acre-feet per year to outside contractors. They include the cities of Mojave, Castaic, Palmdale and Napa, and Alameda and Solano counties. The water is "banked" in underground lakes beneath 12,000 acres of fallow farmland.

The 8,000 acre-feet reserved for Diablo Grande would be arranged via an exchange of rights. Water intended for one of Kern County's districts, flowing south from the Sacramento-San Joaquin Delta in the California Aqueduct, instead would be diverted to Diablo Grande.

Staff writer Garth Stapley can be reached at 578-2390 or gstapley@modbee.com.

DIABLO GRANDE CHRONOLOGY

* 1993: Stanislaus County officials approve plan to create 30,000-acre resort. Critics sue, saying environmental studies don't comply with state law requiring identification of water sources.

* 1996: An appeals court and the California Supreme Court side with critics and order more studies.

* 1998: Critics sue again, challenging Diablo Grande's new studies.

* July 1999: A judge orders halt on resort construction until Diablo Grande comes up with long-term water sources.

* October 1999: The judge revises his ruling, allowing development of 2,300 acres based on water secured through deal with Berrenda-Mesa Water District.

* May 2000: Diablo Grande pushes to substitute a deal with Kern County Water Agency for Berrenda--Mesa approval, to avoid technical snags.