In a significant step toward construction of the Bay Area’s first major new reservoir in nearly two decades, Silicon Valley’s largest water provider has begun negotiations to buy more than 12,000 acres of rural ranch land — an area nearly half the size of San Francisco.

The Santa Clara Valley Water District is hoping to build an $800 million reservoir in southern Santa Clara County near Pacheco Pass, along with a dam up to 300 feet high. The reservoir would hold 130,000 acre-feet of water — enough to meet the water needs of 650,000 people for a year.

But the fact that the district is moving so quickly to buy the land when it has not yet done any engineering or environmental studies, identified a funding source or applied for state money to help build the new reservoir is raising some eyebrows.

If completed, the project would result in the construction of a reservoir nearly the size of Los Vaqueros in Contra Costa County, which was the last major reservoir built in the Bay Area when it was constructed in 1998.

Officials at the district also have been in negotiations with the Contra Costa Water District as part of that agency’s proposal to enlarge Los Vaqueros and potentially share some of the extra water.

But Santa Clara Valley Water District officials say the recent drought showed them they need even more water storage.

Last week, the board of the San Jose-based district authorized its staff to sign an agreement with the Valley Habitat Agency, a government agency that works to preserve wildlife habitat in southern Santa Clara County, to negotiate purchase of the huge property surrounding the dam site. The new reservoir would be the first built in Santa Clara County since 1957 and the largest in the county — 50 percent larger than Anderson Reservoir near Morgan Hill.

The property where it would be located, known as El Toro Ranch, is 12,221 acres and is for sale for $21 million. A working cattle ranch with seven miles of frontage on Highway 152 between Gilroy and San Luis Reservoir near Los Banos, the land is owned by a family corporation controlled by Lewis M. Mathis, a member of a longtime cattle-ranching family that has owned the property since the early 1970s.

“It could help provide habitat and a potential Pacheco reservoir project,” said Gary Kremen, a member of the water district board who chairs the agency’s Pacheco reservoir subcommittee. “We’re trying to buy it at a fair price.”

Valerie Armento, an attorney for the the Valley Habitat Agency, said the agency has been in discussions with representatives of the owners of the ranch for about a year. The agency is working with the Nature Conservancy, a nonprofit environmental group, and is looking for contributions from the water district and possibly other public agencies, she said.

“We are looking at a couple of different funding sources,” Armento said.

Water officials walk atop the 80-year-old North Fork Pacheco Creek Dam to catch a view of the site of a planned $800 million reservoir in the hills of Eastern Santa Clara County near Hollister, Calif., on Tuesday, April 11, 2017. The new reservoir would hold 130,000 acre-feet of water, making it the largest reservoir in Santa Clara County. This dam would be dismantled as part of the project. (Gary Reyes/ Bay Area News Group)

(Gary Reyes/ Bay Area News Group) The North Fork Pacheco Creek sits near the site of a planned $800 million reservoir in the hills of Eastern Santa Clara County near Hollister, Calif., on Tuesday, April 11, 2017. The reservoir would hold 130,000 acre-feet of water, making it the largest reservoir in Santa Clara County. (Gary Reyes/ Bay Area News Group)

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Damage to the spillway of the North Fork Dam, built in the 1930s on Pacheco Creek, is seen in the hills of Eastern Santa Clara County near Hollister, Calif., on Tuesday, April 11, 2017. The Santa Clara Valley Water District, San Benito County Water District, and the dam's owner, Pacheco Pass Water District, are studying whether to build a much larger reservoir at the site. The spillway on the existing reservoir was damaged in winter storms and has been required to be fixed by state dam regulators. (Gary Reyes/ Bay Area News Group)



Before & After: Northern California Reservoirs: The 2017 spate of winter rains has dramatically raised the water levels of many California reservoirs. In Santa Clara County, Lexington Reservoir is now at 105 percent of its nearly 21,000-acre-feet capacity, according to the Santa Clara Valley Water District's historical reservoir gauge information. The California Data Exchange lists San Luis Reservoir as having risen 40 feet, yet the immense water basin is only 70 percent full. Camanche Lake Reservoir, while located in San Joaquin County, is operated by the East Bay Municipal Utility District, and is now 78 percent full after rising 51 feet.

The 2017 spate of winter rains has dramatically raised the water levels of many California reservoirs. The California Data Exchange lists San Luis Reservoir as having risen 40 feet, yet the immense water basin is only 70 percent full. San Luis Reservoir pictured Wednesday, March 16, 2016, after this winter's rains. (Patrick Tehan/Bay Area News Group)

The water level at San Luis Reservoir, as seen from Dinosaur Point, has risen since recent storms near Los Banos, Calif., on Wednesday, Jan. 11, 2017. (Gary Reyes/Bay Area News Group)



The water level at Lexington Reservoir near Los Gatos, Calif., as it appeared on Saturday, Sept. 26, 2015 due to the ongoing drought. (Patrick Tehan/Bay Area News Group)

The water level at Lexington Reservoir was at 105 percent of capacity t of its nearly 21,000-acre-feet capacity, according to the Santa Clara Valley Water District's historical reservoir gauge information on Wednesday, Jan. 11, 2017, with an elevation of 652 feet. (Patrick Tehan/Bay Area News Group)

The boat dock sits in the low water levels at the south side of Camanche Reservoir in Wallace, Calif., on Tuesday, June 9, 2015. As of this summer the reservoir is only 24 percent full. (Dan Rosenstrauch/Bay Area News Group)



Camanche Lake Reservoir, while located in San Joaquin County, is operated by the East Bay Municipal Utility District, and is now 78 percent full after rising 51 feet. Pictured on Friday, Jan. 13, 2017. (Kristopher Skinner/Bay Area News Group)

The Valley Habitat Agency, created in 2013, is a partnership of government agencies, including Santa Clara County, and the cities of San Jose, Gilroy and Morgan Hill, along with affiliated agencies such as the water district and the Santa Clara Valley Transportation Authority. The agency was set up to create a habitat conservation plan to help provide wildlife restoration projects for the partner agencies that are often required to obtain federal and state permits when the construction of new roads, flood-control projects and other public works affect natural areas.

The agency has never purchased a property the size of El Toro Ranch, Armento said.

If the groups bought it — even though a portion would be flooded with the new reservoir — thousands of other acres of land for wildlife would remain, she said.

“There’s plenty of wildlife out there — deer and wild pigs, quail, mountain lions, just about everything that lives out in wilderness property,” said Pete Clark, a broker for the property.

But some environmentalists say negotiating the purchase of the ranch is premature.

“In California there have been many proposals for new dams, very few of which ever came to fruition,” said Jonas Minton, senior water policy adviser at the Planning and Conservation League, a Sacramento environmental group. “Spending millions of ratepayer dollars before even the basic due diligence has been performed is a recipe for financial failure.”

Minton, a former deputy director of the California Department of Water Resources, said most agencies spend years evaluating the feasibility of new dam projects before they buy the land where it would be located.

But Kremen, the water district board member, said that even if the dam is never built, the water district will still need to help acquire wildlife habitat to obtain permits for its construction projects.

Under the proposal, the new reservoir would be built on, or slightly upstream from, an existing reservoir, Pacheco Lake, in the rugged ranch lands about half a mile north of Highway 152 near Casa de Fruta. That lake, owned by the tiny Pacheco Pass Water District, sits on Pacheco Creek behind North Fork Dam, a 100-foot earthen dam built in 1939. The existing reservoir is small and holds only 6,000 acre-feet of water. The new reservoir would hold more than 20 times as much.

The plan would be to tear down North Fork Dam and build a new dam either on the same location or up to a mile upstream in the oak woodlands of the Diablo Range. The new earthen dam would be at least 200 feet tall and potentially 300 feet tall.

The district would take water it now stores in nearby San Luis Reservoir and pipe it into the new reservoir, filling it during wet years.