Montecito Water District approves plan to sell 40% of State Water rights

The Montecito Water District board of directors has unanimously approved a non-binding letter of intent to sell approximately 40% of its State Water Project rights to developers of the proposed Solomon Hills housing project. The transaction, valued at roughly $40 million, involves Solstra Communities California LLC, the team behind a massive residential development planned near Orcutt and Los Alamos.

District officials stated the move aims to bolster the district’s finances and shift focus toward more localized water sources. District Manager Nick Turner noted that State Water has become increasingly costly and unreliable due to its dependence on Northern California snowpack and rainfall. Since 2019, the district has largely replaced State Water usage with desalinated water from the city of Santa Barbara, banking or selling excess allocations.

While the approval marks a significant step, officials cautioned that the process is in its early stages. A formal purchase agreement is targeted for Spring 2027, contingent upon the Solomon Hills project obtaining necessary permits and approvals. Some residents expressed concerns during the meeting regarding the potential impact on water reliability and the district's growing reliance on desalination.