Background
The Denver Metropolitan area and the Colorado Front Range area have long and rich histories of development. From the times of the native populations and cultures through the Westward Expansion of the 1800’s, settlements grew along the banks of the many rivers that traverse the state. Growth and expansion have continued into the 21st Century, especially during the last 25 years of the 20th century.

The region has been a destination for people seeking communities (both large and small) with stable state and local governments, with opportunities for employment, education, mining, and space exploration, and with access to all types of outdoor recreation opportunities (hiking, hunting, camping, skiing, water sports, ice climbing). The list of recreational interests is endless.

Tourism is a key component of success – people come to Colorado to enjoy many of its unique sites and vistas, from the Royal Gorge, the Rocky Mountain National Park, the vast ranges of grasslands on the prairie that have been set aside and protected from development, the dinosaur parks in the northwest, the magnificent views of (and from) the mountain peaks, professional sports venues, world class winter sports activities, boating and kayaking, shopping, museums, galleries, and niches of preserved buildings and the history of the many communities that make up the state’s towns and population centers.

One key to the success of growth in population, government, farming, and communities has been the management of natural resources (oil and gas deposits, mineral deposits, forests, and especially water). Ownership and the beneficial use of water is an essential element of the continued development of the communities and population bases throughout the state. Along with the formation of government, municipal, farming and business communities, during the 1800’s Colorado’s founders and leaders carefully crafted an area of law dedicated to the management and governance of water resources. Water rights are a protected property right in Colorado. Furthermore, Colorado water law relies on the premise of appropriate rights. This means that: (1) water can be used for a beneficial use outside of its drainage basin, (2) water can be transferred between land parcels and can be sold separate from the land, (3) water rights are defined as “first in time, first in use,” which results in Senior and Junior Water Rights; and (4) appropriative rights are based on average stream flow.

Availability of Water in Colorado
More than seventy-one percent (71%) of the earth is covered by water – but less than one percent (1%) of the water is available for drinking. At this time, more than eighty percent (80%) of the water supply in the state of Colorado is west of the Continental Divide while eighty-eight percent (88%) of the population is east of the Continental Divide. More than eighty-five percent (85%) of Colorado’s water is used for agricultural.

More than sixty percent (60%) of the potable water used in the Denver Metropolitan and Front Range areas are from deep aquifers and water basins other than the South Platte River Basin – reliance on water imported from other water basins is a long-established tool used by municipalities, water districts, and communities to meet the needs of the people living in the region.

The South Metro Water Supply Study (“SWSI”), completed in December 2003, provides projections for water needs for a 50 year period. The SWSI Study Area was defined, generally, as most of the urbanized area of Arapahoe County and the northern portion of Douglas County (exclusive of the Town of Parker). Information was collected from the water providers in those areas. Much of this area is described as having a rapid growth rate. Study results indicate that there will be a shortfall of approximately 60,000 acre feet of water by the year 2020.

Municipal water providers and special water districts throughout the Front Range region all have similar forecasts for water demands and shortfalls, for all types of water uses (municipal, industrial, augmentation, agricultural, fire protection, etc.).

Developing Water Resources
Purchasing and developing water resources for current and future land development projects came to the forefront of Southwestern Investment Group’s interests in 2000. The availability of a secure and steadfast water source for retail and residential projects is one of many essential elements to the business of land development.

The Value of Water in Colorado
Recent sales of water in Colorado have shown that its value continues to increase, regardless if the commodity is raw water or treated water, or the source of the water – the prices and value of water continue to increase. In a few instances, an acre foot (a measure of capacity: one acre foot is enough water for a typical family of four, for one year) of water sold for up to $25,000.

Treatment regimens and storage and delivery systems also continue to increase in cost, as well.

Leasing water rights is an avenue used by many to meet the current demand for water, at the same time, the owner of the water has protected his ownership interest.