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WATER, LAND AND OTHER FIXED ASSETS | 6 Months Ended
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Feb. 28, 2023
WATER, LAND AND OTHER FIXED ASSETS |
WATER, LAND AND OTHER FIXED ASSETS | NOTE 6 – WATER, LAND AND OTHER FIXED ASSETS The Company’s water rights and current water and wastewater service agreements, including capitalized terms not defined herein, are more fully described in Note 4 to the 2022 Annual Report. Investment in Water and Water Systems The Company’s Investments in water and water systems consist of the following costs and accumulated depreciation and depletion: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | February 28, 2023 | ​ | August 31, 2022
​ | ​ | ​ | ​ | ​ | Accumulated | ​ | ​ | ​ | ​ | Accumulated
​ | ​ | ​ | ​ | ​ | Depreciation | ​ | ​ | ​ | ​ | Depreciation
(In thousands) |  | Costs |  | and Depletion |  | Costs |  | and Depletion
Rangeview water system | ​ | $ | 19,923 | ​ | $ | (2,451) | ​ | $ | 19,881 | ​ | $ | (2,099)
Rangeview water supply | ​ | ​ | 14,931 | ​ | ​ | (18) | ​ | ​ | 14,809 | ​ | ​ | (17)
Water supply – Other | ​ |  | 7,612 | ​ |  | (1,901) | ​ |  | 7,612 | ​ |  | (1,739)
Sky Ranch water rights and other costs | ​ |  | 7,764 | ​ |  | (1,387) | ​ |  | 7,764 | ​ |  | (1,280)
Sky Ranch pipeline | ​ |  | 5,740 | ​ |  | (1,080) | ​ |  | 5,740 | ​ |  | (984)
Lost Creek water supply | ​ |  | 7,327 | ​ |  | — | ​ |  | 7,041 | ​ |  | —
Fairgrounds water and water system | ​ |  | 2,900 | ​ |  | (1,459) | ​ |  | 2,900 | ​ |  | (1,415)
Wild Pointe service rights | ​ |  | 1,632 | ​ |  | (1,165) | ​ |  | 1,632 | ​ |  | (1,082)
Totals | ​ |  | 67,829 | ​ |  | (9,461) | ​ |  | 67,379 | ​ |  | (8,616)
Net investments in water and water systems | ​ | $ | 58,368 | ​ | ​ | ​ | ​ | $ | 58,763 | ​ | ​ | ​
​ During the six months ended February 28, 2023, the Company acquired three deep water wells in the Lost Creek Designated Groundwater Basin for $0.3 million. ​ Construction in Progress ​ The construction in progress account represents costs incurred on various construction projects currently underway that as of the balance sheet date have not been completed and placed into service. The construction in progress account consists primarily of costs incurred related to the construction of 10 homes to be used in Pure Cycle’s single-family rental business and water facilities being constructed, which the Company anticipates will be placed in service during the next 12 months. During the three and six months ended February 28, 2023, the Company incurred $1.5 million and $2.7 million of costs related to construction of single-family rental units and water and wastewater construction projects. During the three and six months ended February 28, 2023, the Company capitalized $0.6 million and $0.6 million of costs as projects were completed and placed into service. ​ Single-Family Rental Homes During the six months ended February 28, 2022, the Company completed construction of the first three units being utilized in its single-family rental business. The costs of the units are capitalized and when applicable are depreciated over periods not exceeding thirty-years, which is dependent on the asset type. All three units were placed in service and leased effective November 1, 2021. ​ During the year ended August 31, 2022, the Company contracted for construction of 11 additional rental homes to be used in the rental business. The Company began construction on one single-family detached unit in March 2022 which was completed in December 2022 and rented effective December 15, 2022. For the remaining 10 units, comprised of single-family detached houses and paired homes, construction began in the summer of 2022 with estimated completion dates in the third and fourth quarter of fiscal 2023. During the three and six months ended February 28, 2023, the Company incurred costs of $1.0 million and $2.0 million related to the construction of these 11 units. Costs for the 10 units still under construction are included in the construction in progress account as of February 28, 2023. ​ At February 28, 2023, the Company had reserved a total of 46 lots in Phase 2 (ten of which are in Phase 2A and under construction as of February 28, 2023) of Sky Ranch to build additional rental units. On March 8, 2023, and March 16, 2023, the Company amended two home builder agreements, which amendments included the Company retaining an additional 19 units in Phases 2B-D, which brings the total lots reserved in Phase 2 to 65 homes.

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