Commitments and Contingencies |
6 Months Ended |
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Jun. 30, 2016 | |
| Commitments and Contingencies Disclosure [Abstract] | |
| Commitments and Contingencies |
COMMITMENTS AND CONTINGENCIES
Operating Obligations
Upon acquiring Espinosa Road in January 2015, we assumed an eminent domain lawsuit brought by the California Department of Transportation (“CalTrans”) against the previous owner of the property for approximately 4.5 acres of nonfarmable land. CalTrans had offered $160,000 to the previous owner as payment for the 4.5 acres; however, this offer was rejected by the previous owner. Upon acquiring the property, we informed CalTrans of our intention to accept this offer of $160,000 as fair compensation for the 4.5 nonfarmable acres. On May 3, 2016, the matter was settled in our favor, and on July 5, 2016, we received the $160,000 payment from CalTrans. See Note 9, "Subsequent Events" for further discussion on this settlement.
In connection with the lease we executed upon our acquisition of Bear Mountain in September 2015, we agreed to fund the development of the property into an almond orchard. The development will include the removal of 274 acres of old grape vineyards, the installation of a new irrigation system, including the drilling of three new wells, and the planting of over 800 acres of new almond trees. The project is estimated to cost approximately $7.8 million and is expected to be completed during the three months ending September 30, 2016. As stipulated in the lease, we will earn additional rent on the total cost of the development project commensurate with the yield on the initial acquisition and based on the timing of related cash disbursement made by us. As of June 30, 2016, we have expended or accrued approximately $7.1 million related to this project; however, we are unable to estimate the total amount of additional rent to be earned related to this project at this time.
Litigation
We are not currently subject to any material known or threatened litigation.
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