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In 2022, Wyoming landowner Paul Hughes rejected a proposal offering $3,600 per acre for an easement connected to the proposed Alkali Creek Reservoir near Hyattville. Four years later, the Nowood Watershed Improvement District, which is developing the roughly $80 million project, is considering eminent domain to secure the remaining land rights it needs.
According to the Basin Republican-Rustler, Hughes said the 2022 offer was the only one he had ever received.The dispute has turned a local water project into a broader test of property rights, public infrastructure, and the limits of eminent domain. The reservoir is intended to store water for late-season irrigation, but landowners who have not signed easement agreements say the project would benefit downstream users while placing burdens on those whose land lies above the reservoir site.
What the reservoir would do
The proposed Alkali Creek Dam and Reservoir would impound 8,000 acre-feet of water from Medicine Lodge and Paint Rock creeks. Its primary purpose is to provide late-season irrigation for 35 irrigating families in the region.The project has been under discussion for about 15 years. It has also become increasingly expensive, with cost estimates rising from an initial $20 million to as much as $113 million, while legislators have appropriated $59 million so far, as per the report.
The Wyoming Water Development Office and Commission have spent about $8 million on the project, but construction has not begun. The main obstacle is the lack of completed easements from a small number of neighbouring landowners.
The easements still needed
Only 13 acres of permanent easements and 34 acres of temporary easements remain outstanding, according to state Senator Dan Laursen. Those relatively small areas have nonetheless stalled a project that has been planned for years.
Easements do not necessarily transfer ownership of the land. They can give a project developer the right to build, operate, maintain, or access infrastructure across a property, often in exchange for payment or other negotiated terms.For the Alkali Creek project, the easements would include a permanent right of way to operate the Anita Ditch as a pipeline feeding the reservoir. They would also include temporary construction easements needed during building work.
Hughes rejected the 2022 offer
Paul Hughes rejected the $3,600-per-acre easement proposal in 2022. According to the Basin Republican-Rustler, he said it was the only proposal he had received for the project. His rejection matters because the reservoir project cannot move forward without the necessary land rights. The fact that a small number of landowners have declined to sign has left the Nowood Watershed Improvement District with a limited number of options.The dispute has also raised questions about whether the initial offer reflected the value landowners place on their property, access, privacy, and future control. For rural landowners, an easement can affect more than a single acre because construction, maintenance, and access may alter how land is used over time.
Eminent domain enters the discussion
The Nowood Watershed Improvement District has told at least two ranch owners that it expects to begin eminent domain proceedings if they decline a final easement offer.
The letters gave recipients 15 days to respond and proposed easements across seven acres for a total of $19,255, subject to an updated appraisal.Eminent domain, also called condemnation, allows a government or authorised public entity to acquire private property rights for public use, generally with compensation. It remains one of the most controversial tools in infrastructure development because it can override a landowner’s refusal to sell.Wyoming Water Development Office Director Jason Mead described condemnation as the “nuclear option”, as per the report. That language reflects how politically sensitive the issue has become, even among supporters of the reservoir.
A project with growing costs
The Alkali Creek project has drawn criticism because its cost has increased sharply over time. Legislators have appropriated $59 million, while estimates have ranged from $20 million to as much as $113 million.The Wyoming Water Development Commission has spent roughly $8 million on the project without construction beginning. The Nowood Watershed Improvement District has also spent $1.6 million in state funds on property and easements at the Mercer ranch, where the dam and reservoir would be located.The state legislature set a July 1, 2027, deadline for securing the easements. Lawmakers who opposed the project wanted a stricter deadline and attempted to prohibit the use of eminent domain for the project, but those efforts failed, as per reports.
Why landowners are pushing back
Some landowners say the reservoir’s location creates an unfair distribution of benefits and burdens. Those who have not signed easement agreements are located above the reservoir site and would not be able to use the water it stores.Landowner representative Shirran summarised the concern by saying, as per the report, “You can’t put water back upstream.” The comment captures the central objection: landowners above the dam may lose land rights or face construction impacts without receiving the irrigation benefits that downstream users would gain.The dispute is therefore not simply about money. It is also about whether a project designed to serve a specific group of irrigators should be allowed to use eminent domain against neighbours who do not directly benefit from it.
What happens next
The Nowood Watershed Improvement District has said, it was reported, that it will reluctantly initiate eminent domain proceedings if landowners decline its final offers. That means the dispute could move from negotiation into a legal process that determines whether the easements are necessary for a public purpose and how much compensation is owed.The outcome will matter well beyond Hughes and the other holdout landowners. It could shape how future water projects in Wyoming approach easement negotiations, compensation, and the use of condemnation.For now, the Alkali Creek Reservoir remains stalled at the same point it has faced for years. The project has funding, approvals, and a deadline, but it still needs the cooperation of a small number of landowners whose property sits in its path.