Pickens makes a multibillion-dollar water play
Pipeline would transport Panhandle water to big-city suburbs
Listen to this article or download audio file.Click-2-Listen
By Lorraine Woellert
T. Boone Pickens, the high-rolling oilman, may have engineered one of his shrewdest takeovers yet with eight acres of Texas scrub-land.
The land in Roberts County, a stretch of ranchland outside Amarillo, holds no oil. But it is central to Pickens' plan to create an agency to condemn property and sell tax-exempt bonds in the search for one of his other favorite commodities: water.
Approval of the water district was all but certain as Texans voted Tuesday in state and local elections. By law, only the two people who actually live on the eight acres will be allowed to vote: the manager of Pickens' nearby Mesa Vista ranch and his wife. The other three owners, who will sit on the district's board, all work for Pickens.
Pickens "has pulled a shenanigan," said Phillip Smith, a rancher who serves on a local water-conservation board. "He's obtained the right of eminent domain like he was a big city. It's supposed to be for the public good, not a private company."
Pickens and his allies say no shenanigans are involved. Once the district is created, the board will be able to issue tax-exempt bonds to finance construction of Pickens' planned 328-mile, $2.2 billion pipeline to transport water from the Panhandle across the prairie to the suburbs of Dallas and San Antonio.
If Pickens can't find a buyer for the bonds or for his water - and he hasn't yet - he might buy the bonds himself to jump-start the project, said his Dallas-based lawyer, Monty Humble of Vinson & Elkins. The board will spend about $110 million to buy the right-of-way for the pipeline, using the power of eminent domain to acquire property if necessary, Humble said.
[snip]
