Eminent domain action by City of Florence against Curis Resources may come back to bite them

Last week the Town Council of Florence, Arizona, voted to invoke eminent domain to seize 1,187 acres of private land (patented mining claims) owned by Curis Resources. Curis also has, as part of the project, 160 acres of leased State Trust Land.

Curis is trying to develop a copper mine near Florence (see map at bottom of this post). The mine would be an underground, in-situ leach operation which would not mine any rock, but would pump acidic solutions (99.7 percent water and 0.3 percent sulfuric acid) into the ground to dissolve copper. An overlying clay layer would prevent the acidic solutions from contaminating the drinking water supply according to Curis. See my post “Florence Copper another mining controversy” for background on this story and for maps.

According to Curis Resources: “The Florence Copper site hosts a shallowly buried porphyry copper deposit with measured and indicated oxide mineral resources of 429.5 million tons grading 0.331% total copper (at a 0.05% total copper cutoff) and containing 2.84 billion pounds of copper.”

According to an article in the Phoenix Business Journal, a feasibility study conducted by Tucson-based M3 Engineering and Technology Corp estimates that over the projected 13-year life of the project, Curis will pay $162 million in royalties to the State of Arizona, $629 million in state and federal income taxes, $75 million in property taxes, and create as many as 240 jobs in Florence.

The main opponents of the mine, other than the usual anti-mining activists, are local real estate developers (Pulte Homes, Sunbelt Holdings, Nathan & Associates and an investment group called Southwest Value Partners) who want to construct housing developments on surrounding land (see map in my earlier post here). Together, these forces have convinced the town council to oppose the mine.

Curis is threatening to sue the City of Florence over its eminent domain action on the $500 million project. Ironically, the City of Florence is justifying the taking by proposing to use the land as a wastewater treatment plant, just what developers would like to see bordering their housing projects.

According to the Phoenix Business Journal,  “Curis attorney Shane Ham said the town could be on the hook for some hefty legal bills or compensation payments if it loses the eminent domain case.” “Ham said the town has to prove it has legitimate public interest in seizing the land for a water treatment plant or another use. Otherwise, Arizona law says the town would have to pay Curis’ legal bills. Ham also said the courts could determine the cost of the property based on its mining potential. That could translate into Florence having to pay ” hundreds of millions of dollars” to Curis if it wants the property, and city taxpayers would be left holding the bag.

A March 6 press release from Curis Resources says in part:

The law in Arizona and the United States places a high value on the right to own private property and heavily restricts government bodies from unwarranted takings of private property. The Fifth Amendment of the United States Constitution provides that “[n]o person shall be … deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation.” Hence, Curis has no doubt that the courts will not permit the Town to follow through with this Council authorization.

The use of eminent domain comes with onerous legal burdens of proof and costs for the Town if it fails to meet them. Given the tremendous amount of vacant desert land in the region of the Town and the typically small footprint of a wastewater treatment plant, the selection of Curis’ entire private property holdings as a potential site for a wastewater treatment plant lacks foundation.

The Town’s attempted action does not include the 160-acre state trust land parcel on which Curis can operate for nine years, including the Phase 1 production test facility and the first years of commercial operations of Florence Copper. Once final permits are received, Curis plans to continue to move forward with the Phase 1 production test facility in the near-term. The Phase 1 production test facility is intended to demonstrate the safeness of the project, that it operates well within the parameters established by the State (ADEQ) and the Federal (EPA) agencies, and that it provides significant employment and economic benefits and opportunities in the Town and region.

Curis has advised the Town that it is willing to meet, discuss and address any and all concerns with respect to the proposed Florence Copper development, including the ability to accommodate the wastewater treatment facility. The Company remains committed to an open and respectful dialogue with the elected officials and citizens of the community.

At a time when communities are struggling for revenue, opposition to such a revenue-producing ventures makes little sense, but apparently the Florence town council has the same anti-business mind set as Pima County supervisors, who oppose the Rosemont mine and its economic benefits.

Will the NIMBYs prevail?

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