Homebuilders fighting it out with environmentalists and the U.S. over the San Pedro River do agree on something: The impact of a federal court case about water rights there could spread statewide.

Arizona’s entire system to ensure there’s enough water for new development is threatened if environmentalists can stop a proposed 6,900-home subdivision in Sierra Vista, homebuilders say.

On the other side, environmentalists and federal officials are worried that if the subdivision is allowed, its groundwater pumping will dry up the San Pedro River, which is world-renowned for its heavy concentration of bird species.

And both sides are worried that a court precedent could be set, affecting development near rivers throughout Arizona.

Two homebuilders’ groups have filed a friend-of-the-court brief supporting an Arizona Department of Water Resources ruling that the Sierra Vista subdivision has an adequate water supply.

The state’s water-adequacy ruling is being challenged in Maricopa County Superior Court by the U.S. Bureau of Land Management and two environmentalists in a dispute that has now lasted 18 months.

They worry that the proposed Tribute development’s groundwater pumping would dry up the San Pedro and threaten the federal government’s rights to protect it as a conservation area.

But the builders and the state water agency say it’s not settled how much water the river is entitled to carry versus how much can be pumped out for homes, farms, Indian tribes and other uses.

At stake, they say, is the future of development and federal water rights near wilderness areas, federal wild and scenic rivers such as the lower Verde north of Phoenix, and Indian reservations around the state.

More than 60 percent of Arizona is federally owned, including tribal land, and a significant portion has been set aside as federal reservations where the U.S. has claimed or is likely to claim federal water rights, the homebuilders said in the court document.

With homebuilding just starting to recover from the 2008 real estate crash, “it’s vital that the state’s assured and adequate water supply programs continue to function in a predictable fashion,” said the Southern Arizona Home Builders Association and the Home Builders Association of Central Arizona.

Robin Silver, one of the environmentalists fighting Tribute in court, countered that “Anywhere that a well is stealing from a public treasure or a federal property, it will need to be examined.”

Speaking of Tribute, he added, “This case is about the theft of public water, with the smoke screen being Arizona’s fictional water laws. The pumping of these wells will kill the San Pedro River.”

Robert Glennon, a University of Arizona law professor who specializes in water issues, said he can understand homebuilders’ concern about uncertainty about water rights, although he philosophically agrees with those wanting to save the river.

“The business community dislikes uncertainty of any sort, whether the stock market or interest rates,” said Glennon.

There is some precedent for the idea that certain rivers have federal water rights. In Idaho, that state’s Supreme Court ruled in 2000 that federal wild and scenic rivers have reserved water rights, although federal law “is a little ambiguous” on that issue, Glennon observed.

Last year, the Arizona water department ruled that Tribute has an adequate water supply because there’s enough groundwater underneath it to last for 100 years and because its water company has the financial capability to deliver it to customers.

The BLM and environmentalists argue the water isn’t legally available — another state requirement for an adequate water supply — to the future homes. That’s due to federal water rights given by Congress in 1988 to the 56,000-acre, 40-mile long San Pedro Riparian National Conservation Area, they say.

The state agency says it’s not possible to rule on that issue now, because it is awaiting a separate Superior Court ruling. In that court case, the BLM and thousands of other parties have made competing claims to water rights for the San Pedro and the rest of the Gila River basin, which spreads across Southern and Central Arizona. Agreeing, the homebuilders say the only proper legal forum for BLM to pursue its water rights is that Gila proceeding, which has dragged on without resolution for 30 years.

“We have BLM going through the back door, asserting federal reserved rights when they haven’t been determined. We don’t know the magnitude or size or their priority because they haven’t been adjudicated,” said Norm James, an attorney for the homebuilders.

At the same time, he noted, the BLM recently asked to have the Gila water rights case put on hold, even as it tries to use its water rights to stop a homebuilder.

The BLM didn’t respond to James’ criticism. But Sierra Vista environmentalist Tricia Gerrodette, the other plaintiff in the San Pedro-Tribute suit, said the criticism isn’t valid. The BLM simply wants to delay the Gila case until the state water agency finishes a study that is crucial to its outcome, she said.

The water department expects to finish that study next April.

Contact reporter Tony Davis at tdavis@azstarnet.com or 806-7746.