By Jerd Smith
An Arkansas Valley water and land company has left the State of Colorado on the hook for nearly $1.4 million in delinquent loan payments and emergency dam repair bills, and may face a rare foreclosure proceeding by the Colorado Water Conservation Board as a result.
At issue are two state deals, including a loan from the CWCB that has a remaining balance of $622,000 and an unpaid bill involving the Division of Water Resources and the CWCB’s emergency dam repair fund that has a remaining balance of nearly $750,000, according to the state.
Two Rivers Water & Farming Company, which has a history of chronic late payments, this year failed to make any payments on the $622,000 loan and has missed several payments on the emergency dam repair bill, according to the CWCB.
Greg Harrington, Two River’s chief executive officer, did not respond to requests for comment.
In a letter to shareholders late last summer Harrington indicated that the company’s problems were linked to a prior ownership team and the pandemic.
The CWCB’s revolving loan program has 335 active loans worth $400 million. The Two Rivers’ loan would be the first foreclosure the CWCB has pursued in more than 20 years, according to Kirk Russell, who oversees the CWCB’s lending program.
The CWCB loan dates back to 2012, when Two Rivers approached the state with a plan to rehabilitate a reservoir and restore dormant farmland to production, goals that are key to the CWCB’s mission, according to Russell.
“A storage project is right in our wheel house,” Russell said. “And they were interested in returning ag land into production and we are in full support of that.”
The CWCB typically lends to water utilities, cities and towns, and irrigation companies. But because Two Rivers presented valuable water rights and farm land as collateral, the state agreed to the loan.
“We felt that they were a risky borrower, because it was a private company, but we thought that with the collateral we would be protected and we would be able to recover the state’s revolving loan money if we had to foreclose,” said Russell.
Two Rivers is publicly traded on the federal Over The Counter stock exchange (OTC) under the stock symbol TURV. It describes itself as a company that develops “high yield irrigated farm land and the associated water rights in the Western U.S.”
It also has multiple subsidiaries, including two that are linked to the hemp and marijuana industries. One, GrowCo LLC, has filed for bankruptcy in U.S. District Court in Denver.
Whether Two Rivers can repay the state loans isn’t clear. It faces a shareholder lawsuit, and it has failed to file current financial statements with the U.S. Securities and Exchange Commission, as required by law, despite at least one extension.
The last financials were filed Nov. 18, 2019 and cover the first nine months of 2019. They indicate that Two Rivers had $401,000 in cash on hand, long-term assets of $44.5 million, including its water rights, and liabilities of $22.5 million, according to the SEC.
The CWCB has given the company until Dec. 1 to make a $76,000 payment plus late fees to the revolving loan fund. If that doesn’t occur, the agency said it will begin foreclosure proceedings. The CWCB’s board is scheduled to take up the matter at its meeting Nov. 18.
Russell, chair of the CWCB’s finance section, said his agency would seek to take control of the company’s assets, including water rights and farm land, should the board opt to proceed with foreclosure.
Two Rivers has valued its water rights at $25 million, according to filings at the SEC.
How the state plans to address Two River’s other unpaid bills isn’t clear yet.
“I am planning for the worst and hoping for the best,” Russell said. “Our board is interested in recovering the principal and interest lost. I hope they can do that.”
Jerd Smith is editor of Fresh Water News. She can be reached at 720-398-6474, via email at jerd@wateredco.org or @jerd_smith.
This story originally appeared on Fresh Water News, an independent, non-partisan news initiative of Water Education Colorado. WEco is funded by multiple donors. Its editorial policy and donor list can be viewed at wateredco.org.
