Will Zurich take $200m for Calif asset?

The carrier has been asked to sell key assets in the state – a sale that could benefit generations to come

Insurance News

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The Metropolitan Water District of Southern California is looking to purchase four farm islands in the Sacramento-San Joaquin River Delta for use as water storage and as habitats for wildlife. The four islands in question are Bacon Island, Webb Tract, Bouldin Island, and Holland Tract—with a portion of Chipps Island also part of the deal.

The estate is owned by Delta Wetlands Properties, a subsidiary of the Swiss insurance company Zurich Insurance Group. While terms have not been disclosed, the overall cost of the purchase could be around $200 million.

In total, about 20,000 acres of land will be part of the deal. The MWD believes in the potential of the islands once developed.

The MWD is discussing with other water districts based in the San Joaquin area about pitching in the deal, but their participation, as of this writing, is uncertain.

Two of the islands to be acquired happen to be in the path of a proposed water tunnel system that the water importer and other water districts are funding. Should the MWD acquire the islands, it would save the water importer from drawn-out eminent domain proceedings and make things easier for the water tunnel construction crews.

Although they would serve as potential water sources, the MWD said that the islands are “not significant from a supply standpoint.” The MWD instead wants to focus on turning the islands into habitats for fish, particularly endangered fish at risk from export pumps in the south delta.

By improving the islands as habitats, the MWD can offset the environmental impact of the proposed water tunnel project.

"We really see the long-term value here as the potential ability to transform the lands into something that is more protective of our long-term interests with the environmental benefits and mitigation requirements," said Jeffrey Kightlinger, general manager for MWD.
 

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