Experienced Representation
For Arizona’s Businesses

Colorado River water crisis could impact commercial development

On Behalf of | Feb 10, 2023 | Business & Commercial Law

Because of drought conditions in the western part of the United States, water conservation efforts are critical for maintaining Arizona’s water supply. Commercial and industrial operations utilize about 15% of the water supply in the state.

The current water crisis involving the Colorado River could impact commercial development in Arizona.

Colorado River water crisis

Arizona, Colorado, California, New Mexico, Nevada, Wyoming and Utah all rely on the Colorado River as part of their water supply. Drought conditions prompted the Bureau of Reclamation to ask these states to agree to a plan to conserve 2.4 million acre-feet of water. However, the states have not reached an agreement, which may result in the federal government determining the terms of the plan.

Impact on commercial development

Whether commercial properties receive municipal water or have their own groundwater rights, property owners must comply with the conservation requirements detailed in Chapter 5 or Chapter 6 of the Third Management Plan. If the conservation plan for the Colorado River results in a reduced water supply for the state, Arizona municipalities may enforce stricter conservation requirements and impose higher rates for municipal water services. Commercial developers must account for these increased costs when making purchasing decisions and take steps to ensure any property they purchase has sufficient water access to support the intended use.

Developers can protect their investments against changing water conditions by developing water-efficient programs, installing high-efficiency toilets, water heaters and other appliances and utilizing low-water-use landscaping. Proper water management is likely to become increasingly important for commercial developers as drought conditions persist in the state.