Redtail hawks glide off telephone poles sailing above verdant fields that scoop downward along a basalt slope to the bending Columbia River.
This unique swath of ground is about to get a new owner: the roughly 12,000 Easterday family acres in Benton County are to be auctioned off starting in mid-June.
The crisis that began with a massive swindle of 225,000 ghost cattle has meant federal charges for Cody Easterday and bankruptcy for a family farming and ranching dynasty as the vast Easterday empire unravels.
Burgers, fries and onion rings
Easterday Ranches and Easterday Farms has provided beef, potatoes, onions and produce to dinner tables for more than three generations.
Now in bankruptcy, many of the family’s key properties will be sold to repay debts. It’s one of the largest sales of prime water-rich agricultural lands in the Columbia Basin in recent history.
“(The bankruptcy and property sale) is a big deal for the community,” says Adam Fyall, sustainable development director for Benton County. “When people heard about this a couple months ago, it was an ‘Oh my God,’ type of moment.”
The Easterday family water rights alone are worth thousands of dollars per acre foot (the amount of water it takes to fill an acre of land with water, one foot high). Benton and Franklin counties as a region have done really well in economic growth over the past decade, says Ajsa Suljic, regional labor economist for the Washington State Employment Security Department.
“The population has been the fastest growing in the state for the past 10 years,” Suljic says. “And it has driven a growth of jobs and service providing industries. In return, goods producing industries like construction and agriculture have benefited from population demand and labor supply.”
That growth may add to the land value beyond prime agricultural land. Investors are often looking for assets that will return big dividends decades into the future.
Going, going, gone
The auction kicks off June 14. The debtors hope to find what’s called a “Stalking Horse Bidder” — basically a bidder or company that wants all the parcels together and puts a bid on the table for others to bid against. The stalking horse bidder usually receives a fee to play this role, even if it doesn’t win the ultimate bidding. If there’s at least one more qualified bidder, the auction will proceed. The asking prices of the four properties together is $210 million.
Flo Sayre, based in Pasco, is with Land and Wildlife Real Estate Services, one of the real estate firms specializing in large deals helping prospective buyers with the sale. Sayre says it’s rare to find so many large lots of land for sale in the Northwest.
“You find a lot of property, but not of this size with irrigation,” she says.
Only potential bidders who have financial information or letters from their equity holders can get the inside sale information from the electronic data room and become a vetted bidder.
Multiple sources who are familiar with the deal, speaking on background to the public media Northwest News Network, offered educated guesses about buyers large enough to bid on the valuable Easterday ground:
- Controversial entrepreneur Frank Tiegs, a farming tycoon in the Mid-Columbia, who owns thousands of irrigated acres;
- Fast-expanding regional cities like Kennewick, Pasco and Richland that might want the water and/or land for future growth;
- Two separate Hutterite colonies — one near Warden and another near Ritzville — are eager to build a new, third colony with farms;
- Large California-based irrigated agriculture companies;
- Top domestic or international wine growers who may want the water rights or land; and
- Outside investment firms, which recently have been buying up land in the area — like Angelina Ag Co, and Cottonwood Ag Management — both owned by Bill and Melinda Gates. It’s not clear if the couple’s recently announced divorce will be a factor.
Four farms for sale
There are four farms for sale, each a unique property that could be sold as a package or possibly broken into separate parcels.
“It’s an unprecedented opportunity,” says Scott Musser, of Pasco-based Musser Bros. Inc, an agricultural auction house. “It’s gonna be interesting to see who is the ultimate victor.”
Musser says farm ground in the area has been so hot that it rarely goes on sale publicly. Instead, he says, it’s traded among established families over coffee table deals.
Plus, a diverse array of valuable crops could be grown on the prime Easterday land.
“Last weekend I was in Fargo, North Dakota and back there, it’s soybeans and corn — period,” Musser says. “(In Benton County) you got everything: peaches, Brussels sprouts, broccoli, wine grapes, hops, potatoes, alfalfa, onions, watermelons, cantaloupe, asparagus, cherries, apples, nectarines — there are very few things that aren’t really grown here on a huge scale.”
What and where
All four farms are east of Plymouth and south of Finley. According to the court documents:
Goose Gap Farm is about 6,300 acres. The property includes, among other things, pivot irrigated farmland, dry pasture land, and a pump house. Goose Gap Farm also includes additional leasehold acreage.
Lender: Prudential Insurance Company of America has a lien on the property.
Owners: Title to Goose Gap Farm is held in the names of Gale, Karen, Cody and Debby Easterday, as 100% owners.
River Farm is about 5,800 acres and includes an approximately 8,400-square-foot shop, storage facilities for about 95,000 bushels of grain, and three manufactured homes. River also includes additional leasehold acreage.
Lender: Prudential Mortgage has a lien on the property.
Owners: Title to River Farm is held in the names of Easterday Farms and Gale, Karen, Cody and Debby Easterday, with Easterday Farms owning 0.7% and Gale, Karen, Cody and Debby Easterday owning 99.3%.
Nine Canyon Farm is about 3,000 acres, and includes a grape vineyard, cherry orchard, 40,000 square feet of storage facilities, including facilities suitable to hold 5,000 tons of potatoes, four manufactured homes, and a mobile home park with six mobile homes.
Lender: Prudential Mortgage has a lien on the property.
Owners: Title to Nine Canyon Farm is held in the name of Easterday Ranches as 100% owner.
Cox Farm is about 7,500 acres, and includes, among other things, feedlot facilities capable of housing and feeding approximately 35,000 head of cattle, pivot irrigated farmland, a 4,300 square foot horse barn, and a 2,500 square foot residence. Cox also includes additional leasehold acreage, a steel dry commodity and hay storage shed, and nearly 67,000 square feet of storage facilities, including facilities to store over 5,200 tons of onions, 175,000 bushels of dry grain, 30,000 tons of high moisture corn, as well as an additional 30,000 tons of silage storage.
Lender: Cox Farm is subject to a lien asserted by AXA Equitable, securing an obligation in the asserted principal amount of approximately $25.5 million. The Storage Complex is subject to a lien asserted by LTM Investments, securing an obligation in the principal amount of approximately $638,000.
Owners: Title to Cox Farm is held in the names of Ranches, Farms and Gale, Karen, Cody and Debby Easterday, with Easterday Ranches owning 66.1%, Easterday Farms owning 7.1% and Gale, Karen, Cody and Debby Easterday owning 26.8%. The Storage Complex Title is held in the name of Easterday Farms as 100% owner.
In the dry but fertile Mid-Columbia, water is king.
Each of these four farms comes with its own valuable water rights, says Darryll Olsen, with the Columbia-Snake River Irrigators Association. The nonprofit has worked on these exact water rights several different times over the last decade. “The punchline is they are principally certificates,” Olsen says. “They are being exercised to the state water code and the total amount of acreage covered by the water rights is 12,700 acres. And they’ve got roughly 31,000 acre feet. That’s worth, standing alone, probably about $90 million to $100 million, just in water rights alone. You’ve got all the ground and infrastructure. So the land will go for a much higher price than that.”
Willing buyers and willing sellers can make these transactions, but the state has to examine the water rights and approve any change and transfer of rights, according to Joye Redfield-Wilder with the state Department of Ecology. And water rights can be valuable where they don’t have a lot of senior water rights available, she says.
According to Benton County’s Fyall, the county acquired some water rights in 2018 for its Rural Water Supply Program, which helps property owners develop or build new homes in the Yakima watershed. In the Yakima Basin, any water right after May 1905 can be curtailed if there’s a drought.
Benton County paid about $6,500 an acre foot for its fresh water rights. Usually there are three acre feet per acre of farm ground. Fyall points out the recent purchases were fully perfected, pre-1905, senior surface water rights out of the Yakima River, not the Columbia.
Olsen says Columbia River rights often sell for around $2,500 to $3,000 per acre foot.
The Easterday mega-land deal is being advertised by Skye Root Advisory, a large-scale agricultural lands broker based in Idaho.
Property dealmaker Sayer says anyone who wants to bid will need to have ready cash and be prepared to take over mid-season.
“(The Easterdays’ four farms are) not easily separated,” Sayer says. “It’s all intertwined with water (rights). They have to have a complete management system in place, or they better get managers to stay on because those are the people that know how the system works.”
She says so far there have been more than a dozen requests for buyer information packets.
Each bid must be transmitted via email before 4 p.m. on May 31. Any objection to the sale must be made in writing to the federal court before June 30. The federal judge will conduct the sale hearing July 14.
It is unclear if paying off lien holders and creditors with the proceeds from the land sales will count toward the $244 million that Cody Easterday owes in federal restitution.
Timothy Conway, lawyer for Cody Easterday’s mother, Karen, said in a federal hearing April 28 that the Easterday family had no interest in bidding on their own property.
Many in the region are eager to see the sale unfold. Irrigator-advocate Olsen says when it comes to sunlight, soils, irrigation, economy, technology, science and even crop transportation to market: “This is the place to be doing irrigated agriculture on the planet, period.”