A project that had become a California Environmental Quality Act (CEQA) lightning rod has apparently died. Nestlé Waters North America notified the McCloud Community Services District that it is dropping plans to convert a closed lumber mill in Siskiyou County into a water-bottling plant because it is building the facility in Sacramento instead.
In early 2007, a state appellate court ruled that a 100-year contract between Nestlé and the district – in which the district agreed to supply the company with up to 1,600 acre-feet of water for about $400,000 a year and other considerations – was immune from environmental review because the company's ultimate project would be the subject of an environmental impact report (Concerned McCloud Citizens v. McCloud Community Services Dist., (2007) 147 Cal.App.4th 181; see CP&DR Legal Digest, March 2007). That decision has helped define a "project" under CEQA.
An EIR for the 1-million-square-foot water-bottling plant went forward under intense scrutiny from environmentalists and fishermen worried about the project's effects on  groundwater sources and creeks. Last year, Attorney General Jerry Brown threatened to sue the district and Nestlé if the EIR did not address the global warming effects of producing plastic water bottles and trucking them to the water source and then to market. At about that same time, the company announced it would scale back the project by 60%.
In July, Nestlé revealed it plans to build a bottling plant in Sacramento, using water from the City of Sacramento and from a private spring. A September 10 letter from the company to the McCloud district, citing the Sacramento project, stated, "We have concluded that we no longer have a business need to build a new facility in McCloud."
While Nestlé's withdrawal pleased environmentalists and anglers in Siskiyou County, it frustrated district and economic development advocates who face a county unemployment rate of 14%, according to the Employment Development Department.