Governor Hobbs terminates Saudi-owned Fondomonte lease, announces nonrenewal of 3 others

The company Fondomonte Arizona leases thousands of acres of state land in the Butler Valley.
The company Fondomonte Arizona leases thousands of acres of state land in the Butler Valley.(Arizona's Family)
Published: Oct. 2, 2023 at 3:41 PM MST
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TUCSON, Ariz. (13 News) - Today, Governor Katie Hobbs announced that the State Land Department has terminated one of Fondomonte Arizona, LLC’s four Butler Valley leases and simultaneously delivered notice that the State would not renew the company’s three other leases in the valley when they expire in February of 2024.

According to the Hobbs Administration, after the Governor directed the State Land Department to conduct inspections of the leased property as part of a broader round of inspections of the largest state trust land leases, it was found that Fondomonte is in significant ongoing default of its lease dating back to 2016.

“I’m not afraid to do what my predecessors refused to do—hold people accountable, maximize value for the state land trust, and protect Arizona’s water future,” said Governor Katie Hobbs. “It’s unacceptable that Fondomonte has continued to pump unchecked amounts of groundwater out of our state while in clear default on their lease. I’m proud my administration has taken swift action to hold defaulting high-volume water users accountable and bring an end to these leases. And moving forward, I will continue to do everything in my power to protect Arizona’s water so we can continue to sustainably grow for generations to come.”

In November 2016, Fondomonte was given notice and an opportunity to cure numerous defaults under its Butler Valley leases, including a failure to include secondary containment structures on its fuel and Diesel Exhaust Fluid storage units.

During an inspection in mid-August of this year, it was determined that Fondomonte had not corrected the default after nearly seven years. According to the Hobbs administration, this significant default of their lease gives the Department grounds to terminate the lease.

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