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The Arizona state flag. (Courtesy photo)

PHOENIX -- State water officials did not properly consider the rights of the Bureau of Land Management when it gave the go-ahead for a 7,000-home development in Sierra Vista, the Arizona Court of Appeals ruled Tuesday.

The judges on one hand said the Department of Water Resources did nothing wrong with determining that the Pueblo del Sol Water Co. showed the water is "legally available'' and it is able to provide water to the development.

But Judge Jon Thompson, writing for the unanimous court, said DWR did not consider that the BLM has a claim on some of the underground water, a claim based on Congress having established a conservation area along the San Pedro River. Thompson said only after the state takes that into account can it determine if there is still enough water left over to allow for the Tribute development.

Yet the appellate court said while the BLM's interests need to be taken into account, the state does not have to separately consider the potential impact of the proposed groundwater pumping on the San Pedro National Conservation Area.

"It's a partial victory,'' said attorney Joy Herr-Cardillo of the Arizona Center for Law in the Public Interest, representing those challenging the department's original decision to allow the development.

She said while the ruling does not specifically protect the riparian habitat, any decision giving the BLM the water it needs effectively accomplishes the same purpose.

A spokesman for the Department of Water Resources said his agency was still studying the ruling and had no immediate comment.

Tuesday's ruling is the second setback this year for efforts by Castle & Cooke to develop the property.

Earlier this year, Gov. Doug Ducey vetoed a measure which would have allowed Sierra Vista to decide that the developer did not need to prove it had adequate water, a move that would have effectively short-circuited any legal challenges.

"Ensuring the certainty and sustainability of Arizona water is a top priority,'' the governor wrote. "I will not sign legislation that threatens Arizona's water future.''

The issue has its roots in the 1980 Groundwater Management Act that resulted in creation of five "active management areas.''

For the Phoenix, Prescott and Tucson areas, the goal is "safe yield'' by 2025 when the amount of groundwater withdrawn is no more than recharge. Pinal and Santa Cruz have other goals.

Outside those areas, developers must get a determination from DWR of whether there is a 100-year assured water supply.

The lack of that, however, does not prevent them from building. They do, however, have to disclose that fact to initial buyers.

And what's important here is a change in that 1980 law that allows counties to actually mandate that 100-year showing before development can occur, something Cochise and Yuma counties have done.

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