Sand Creek Ranch

Until last year, the ten or so miles between the city of Buffalo and the Bighorn Mountains was a popular place to build subdivisions.

Developer John Jenkins calls these divisions “a dozen pans of fudge busted into ten acre squares.”

Jenkins and his wife Carol own the 856-acre Sand Creek Ranch that sits squarely in the middle of the development path. The fate of Sand Creek probably would have been sealed with another owner, but it’s fair to say Jenkins is not your typical Johnson County ranch owner.

Jenkins has a history of land development experiments, some more successful than others. In the 1980s, when water and energy issues were big, Jenkins unsuccessfully proposed a “pump storage” scheme on the Little Big Horn River.

In 1997, Jenkins and other business partners bought the Wagonhound Ranch outside Douglas, Wyoming.

They teamed up with Sotheby’s International Realty to list eighteen 40-acre homesites at $875,000 apiece. The eighteen landowners, through a “ranchstead association,” in theory would collectively own the remaining 13,500 acres of pasture, hay meadow, and mountain.

In 1999, before the project got substantially underway, Art Nicholas, who founded the Del Mar, California-based Nicholas Investment Partners, bought the entire property.

In 2002, Jenkins and other investors tried to open a ski area in Encampment, the Grand Encampment Mountain Resort. The development, which would have included 285 new homes, died when the Wyoming Business Council refused to loan the project $15 million.

Jenkins also owns mineral properties (Jenkins Minerals) and possess considerable political savvy. In the 1970s, he managed successful campaigns, including one for Democrat Ed Herschler for governor and another for Republican Malcolm Wallop for U.S. Senate.

Jenkins is a big man, 6-foot-5 and over 250 pounds, and a curious combination of humility and hubris. When he doesn’t understand something, he systematically reads, researches and asks a lot of questions.  When he does know something, it’s hard to shut him up. He is a man of enthusiastic convictions, known for his doggedness, ambitious ideas, and big words.

In developing Sand Creek, Jenkins has clearly riled some folks in the county. His success in obtaining a variance on road widths within Sand Creek  (he wanted his roads narrower than local code allowed) endeared him to few.

But he impresses people, too.

“John’s a magician,” says planning commissioner Graves. “He knows how to hobble the hind legs of a cow so it won’t kick him.”

Now, as a real estate developer, Jenkins claims to do well by doing good. He has dialed in on the twin Wyoming anxieties of disappearing open space around cities and towns, and the fate of the working ranch.

The average Wyoming cattle or sheep operation runs a yearly profit of about 2 to 4 percent, “but that’s over the long term,” said Tex Taylor, a professor of agricultural economics at the University of Wyoming. “We have a lot of droughty years, too. There’s not a lot of wealth in this business.”

Such a low return might sustain one household, but most ranches are family corporations, many with multiple shareholders. As new generations arise, it is increasingly difficult to make enough money to support all shareholders. Real problems surface when one family member wants to be bought out of the ranch.

The solution is often to sell some–or all–of the ranch.

If the property has high recreational value–for example, it is scenic, or has good fishing or hunting–it can command top real estate dollar as an “amenity ranch.”  As the saying goes, if the ranch is near a growing urban area, its last crop is houses.

Jenkins has been trying to figure out how to make money another way: keeping cash-strapped (or as Jenkins, fond of fancy terms, would say, “capital-constrained”) working ranches from being transformed into subdivisions.

Jenkins’ family has owned Sand Creek Ranch since 1968 but has never lived there. Until 1997, he leased the Sand Creek Ranch to a cattle operator “and it got beat to death as a winter feed ground,” he says. After 1997, he did not renew the lease and began plans to develop his land.

Sand Creek Ranch is now a housing development and advertises itself as the Sand Creek Conservation Community: “a brand new way for conservation-minded individuals, families and active retirees to own and live on an ideal ranch.”

The Sand Creek website advertises the development as “low density Ranch neighborhoods.”

Stripped of marketing’s verbal tinsel, Sand Creek Ranch could be described as a housing development of 99 one-acre plots.

But Jenkins’ plan calls for leaving 86 percent of the property–737 acres—undeveloped, with 508 acres in agricultural production. So Sand Creek also could be seen as an “amenity subdivision” Wyoming-style, with houses tastefully sited around a ranch instead of a golf course.

Jenkins’s vision of his ranch’s future is crystal-clear, at least to him: this is a new way to divide land to protect  ranching and preserve open space. Sand Creek will be a hay/alfalfa-producing property with 99 owners. Each owner gets a one-acre lot set on a hill or away from an alfalfa field with a good view of the Big Horns. Each also gets a one-ninety-ninth interest in the ranch.

The Sand Creek Conservation Community so far has 15 buyers–11 at the time of the tax actions–who have paid an average of $168,369 each for a one-acre lot and the interest in the ranch corporation.

Sand Creek plans a sparkling new sprinkler irrigation system for the land dedicated to hay and alfalfa. That land will be much more productive when it goes under sprinklers, which the small ranch could not afford before, Jenkins says. The irrigation project is possible now thanks in part to government–federal and state–assistance.

Jenkins received federal Natural Resource Conservation Service financial and professional assistance in bringing water to his new on-farm sprinkler system.

He banded together with five neighbors to form the Hopkins Producers Irrigation District. The state gave Hopkins $703,500 to help upgrade irrigation water delivery. Jenkins estimates that he has put in $200,000 in unpaid labor to set up the Hopkins Producers Irrigation District, and that the combined six ranches have invested “upwards of $2 million in on-farm development,” meaning new pipelines, sprinklers and developing new pasture.

Jenkins calculates that when fully operational in spring 2010, Sand Creek Ranch with its new irrigation system could harvest about 2,000 tons of hay per year, which would make it one of Johnson County’s larger alfalfa and hay producers.

Samuel Western

Samuel Western of Sheridan is a university lecturer, poet and U.S. regional correspondent for The Economist. He is the author of Pushed Off the Mountain Sold Down the River: Wyoming’s Search for Its...

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