Arizona halts state land leases over sewage sludge concerns

(The Center Square) - The Arizona State Land Department canceled one lease and did not renew four others for Yuma County-based AgTech amid concerns over a commercial biosolids operation, officials said. 

 

ASLD said AgTech, a biosolids land application company, used state agricultural property for an unauthorized commercial biosolids collection and disposal business, despite leases authorizing only agricultural use.

The land AgTech leased was part of the Arizona State Land Trust, which helps fund the state’s K-12 education. AgTech held the land leases for its biosolids operation, according to the Arizona governor’s office.

The Environmental Protection Agency describes biosolids as being used to spread “sewage sludge into or onto the land to either condition the soil or fertilize crops or vegetation grown in the soil.”

The Arizona governor’s office said AgTech started leasing state land in 2002.

In 2025, 97% of the more than 68,000 dry metric tons of treated sewage sludge the company applied on state land came from California, the governor’s office said.

In the letters sent to the company, ASLD alleged AgTech failed to obtain written authorization to gather biosolids from Arizona and California municipal utilities and dispose of them on state land.

ASLD also accused AgTech of using an estimated 140 dry metric tons of biosolids per acre yearly, 20 times the estimated seven dry metric tons per acre applied on average by other Arizona agricultural biosolids applicators.

According to the ASLD, AgTech was the only state “registered biosolids land applicator in Arizona applying domestic septage in agricultural land.”

The ASLD said “this volume of application is not in the best interest of the Trust.”

Gov. Katie Hobbs said Arizona will not be a “disposal site for California’s treated sewage sludge.” She noted the company’s commercial operations on Arizona land were harming “local businesses, hurting Arizona farmers and eroding the quality of life of families in the community.”

In December 2025, the Yuma County Board of Supervisors sent a letter to ASLD raising concerns that AgTech’s use of state land harmed community members.

The board said the company’s operations provided “overwhelming odors, severe fly infestations, and the spread of dust and debris from the use of biosolids.” On top of this, the board claimed local growers experienced “significant crop losses“ worth “millions of dollars every year” because of the conditions created by how AgTech applied its biosolids.

In a statement to The Center Square, Lynn Cordova, the ASLD’s public information officer, said its core mission is to “maximize the value of State Land Trust and protect the beneficiaries of [it].”

“Following years of inspections, direct engagement, and formal compliance reviews, ASLD determined that AgTech operated outside its permitted agricultural scope and violated key lease terms,” Cordova wrote.

She wrote AgTech earned $150,000 annually from its leases.

“AgTech’s other commercial activities taking place on the agricultural leases of State Land Trust hinder ASLD's ability to fulfill its mission of maximizing the [land’s value] in the area,” Cordova wrote.

According to Cordova, since AgTech has “failed to maintain substantial compliance” with its leases, the company “would likely continue this pattern to the detriment of [the] State Land Trust.”

Cordova wrote AgTech can continue to occupy its leases until Dec. 11th, then will have 90 days to remove its physical property from state land. After the land is vacant, she wrote it will be evaluated to “assess” the land’s condition and determine if “remediation is needed.”

AgTech, in a statement to The Center Square, wrote its legal counsel is reviewing its options. The Center Square asked AgTech for an interview, but the company sent an anonymous statement refusing to attribute it to anyone.  
The company claimed ASLD violated “the due process provisions of its own leases and the statutory protections granted under the Regulatory Bill of Rights.”

AgTech called Arizona’s actions “disappointing given these protected rights.” The company wrote ASLD did not issue any “prior allegations of noncompliance before the denial letter, as required by the lease and state law.”

ASLD’s “unlawful actions” should be of concern to Arizona farmers and businesses because they establish a “slippery slope,” AgTech's statement said.

The company wrote “these unsubstantiated actions” put nearly 100 jobs in jeopardy.

To its customers, AgTech wrote it will continue to provide service to them while the company works through the situation.