Pure Cycle to Acquire Sky Ranch Property
04 Août 2010 - 7:39PM
Pure Cycle Corporation (Nasdaq:PCYO) announced effective July 30,
2010, it has entered into an agreement which will allow it to
acquire the 931-acre Sky Ranch Property for $7.0 million in cash.
The transaction is expected to close within 60 days; however, we
can terminate the agreement for any reason during this 60 day
period if we so chose.
In 2003 and 2004, we entered into two water service agreements
and a groundwater purchase agreement with the developer of Sky
Ranch. However, the developer entered into bankruptcy in 2007,
which resulted in uncertainty regarding these agreements. Mark
Harding, the President and CEO of Pure Cycle, stated that, "By
acquiring the property we remove the uncertainties created by the
bankruptcy and ensure that we are the water provider to the
property once it is developed." Mr. Harding
further commented that, "In addition to solidifying our existing
water service agreements, this acquisition expands our opportunity
to include wastewater service to the property, allows us to
complete our acquisition of the water rights at Sky Ranch, and
facilitates our use of highly treated wastewater effluent,
distributed through a dedicated reclaimed water distribution
system, to meet outdoor irrigation demands. The inclusion of
wastewater will enable us to implement our environmentally
sensitive water recycling operations reusing highly treated
effluent water supplies distributed through a dedicated water
distribution system to provide water for outdoor irrigation
demands. Protecting, using and reusing Colorado's valuable
water resources, demonstrates our commitment to environmentally
responsible stewardship over this scarce and limited
resource." As the owner of both the property and the water
rights which will be used to provide services to the property when
it is developed, we have positioned ourselves to offer developers
an integrated, cost effective and ready for development package,
and thus Sky Ranch represents an important strategic acquisition
for us. We believe we have secured private financing for this
acquisition. The terms of such financing will be announced
once finalized.
About Sky Ranch
Sky Ranch is located in Arapahoe County, Colorado directly
adjacent to I-70, approximately 16 miles east of Downtown Denver, 4
miles north of the Lowry Range, and 4 miles south of Denver
International Airport. Sky Ranch has been zoned for
residential, commercial and retail uses and may include up to 4,850
single family equivalent units. Current development plans
anticipate entry level housing (houses costing less than
$300,000). The water and wastewater utilities at Sky Ranch are
anticipated to generate approximately $132.8 million in tap fee
revenue and approximately $6 million annually in service fee
revenue upon completion of development (based on current tap fees
and usage charges). We do not anticipate developing the
property ourselves. Rather we plan to partner with national
home builders/developers to provide them with competitively priced
lots that are ready for development together with affordable,
sustainable, environmentally sound water and wastewater
services. With a land acquisition price of approximately
$1,400 per entitled lot, we believe this property is well
positioned to offer affordable land and utilities to home builders
and developers looking to construct entry level
houses. Although we do not know exactly when this property
will develop, land development experts believe the entry level
housing market will be the first product to rebound in the Denver
metropolitan area.
We will host a conference call to discuss this acquisition on
August 5, 2010 at 10:00 AM Mountain (12:00 PM Eastern). The
call in number is (877) 377-7104, which will be webcast on our
website, and we will have a slide presentation available at
www.purecyclewater.com.
Company Information
Pure Cycle owns water assets in multiple river basins in the
State of Colorado as well as in certain aquifers in the Denver
metropolitan area. Pure Cycle provides water and wastewater
services to customers located in the Denver metropolitan area
including the design, construction, operation and maintenance of
water and wastewater systems.
Additional information including our recent press releases and
Annual Reports are available at www.purecyclewater.com, or you may
contact our President, Mark W. Harding, at 303-292-3456.
CONTACT: Pure Cycle Corporation
Mark W. Harding, President
303-292-3456
www.purecyclewater.com
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