As it gears up to fight lawsuits over its proposed water storage and transfer project in the Mojave Desert, Cadiz Inc. of Los Angeles has made a break with its past, naming a new chief executive to replace its controversial co-founder.

The company has also restructured its debt and raised $17.5 million, some of which will go toward the legal battles.

For nearly 20 years, Cadiz has pushed a project to store water in an aquifer underneath its 35,000-acre holdings of remote Cadiz Valley land in the Mojave Desert and then sell that water to various local water agencies.

The company received environmental approval last year to proceed with its latest plan to pump about 16 billion gallons of water a year from the aquifer through pipelines to the region’s water network. By some estimates, selling that water to a half-dozen local water agencies could net the company more than $1 billion over the next 50 years, assuming the project survives the legal challenges.

In February, Keith Brackpool, the company’s co-founder and long its chairman and chief executive, relinquished his chief executive title, handing it to President Scott Slater.

Brackpool, a prodigious contributor to campaigns of state and local elected officials, has maintained close relationships with several of them. In the process, he became a lightning rod for critics of the Cadiz project. The relationships prompted a Los Angeles Times columnist to write in 2009 that Brackpool “continues to attract political sycophants happy to attest to his wisdom in the ways of water policy – while they accept campaign contributions and consulting fees from him and his company.”

By stepping aside as chief executive, he might help distance the company from this controversy, according to one longtime Cadiz observer.

“This move gives the company a clean break with the past and a fresh approach,” said Larry Kosmont, an L.A. economic development consultant.

Kosmont was on the board of regional water wholesaler Metropolitan Water District of Southern California when a larger-scale Cadiz project was first presented to the agency in the late 1990s. He left the board before it voted to reject that proposal in 2002.

Courting power

Since becoming Cadiz chief executive in 1991, Brackpool, 55, has forged friendships with elected officials and contributed generously to their campaigns. He and others connected with Cadiz contributed more than $345,000 to former Gov. Gray Davis’ two gubernatorial campaigns. They also donated more than $40,000 to Antonio Villaraigosa’s campaigns for Assembly and L.A. mayor.

In addition, Brackpool served as special adviser to Davis on water issues, while Villaraigosa did some consulting work for Cadiz after leaving the Assembly. Former Gov. Arnold Schwarzenegger appointed Brackpool, a horse owner, to the state Horse Racing Board.

To help diffuse the criticism that accompanied those relationships, the Cadiz board has been steadily handing over more power to Slater, a water attorney who joined the company in 2008. Slater, also 55, was named president in April 2011 and joined the company’s board last year; on Feb. 1, he was named chief executive.

“His transition to the CEO role represents the company’s confidence in his ability to bring the project over the finish line and steer Cadiz through its next phase,” the company said last week in a statement to the Business Journal.

Kosmont said the controversy surrounding Brackpool was a key reason behind the chief executive switch.

“While Keith has many qualities that created opportunities for Cadiz, those same qualities generated a backlash,” Kosmont said. “That’s why a clean break now is good.”

More financing

While its water project gained a crucial environmental approval from the Santa Margarita Water District in southern Orange County last summer, it now faces lawsuits from the Center for Biological Diversity and several other environmental groups. The lawsuits allege the project will harm sensitive habitat for several desert plants and animals, and will generate significant dust pollution.

Tetra Technologies Inc. of Woodland, Texas, which operates a nearby salt-mining operation, has also filed suit.

To raise more money to finance its upcoming legal battles, Cadiz last month arranged a debt refinancing package that included a $53 million convertible bond offering and $30 million in secured debt. These instruments replaced existing corporate debt of $66 million that was due June 29 and also provided the additional $17.5 million in financing.

The additional cash will be used to prepare the Cadiz site for construction, make pipeline-related lease payments and to finance litigation expenses.

Kosmont said the timing for Cadiz is improving. That’s because more major residential development projects are moving forward throughout the state. A state law passed a decade ago requires that all projects with more than 500 units must show agreements with water providers to supply sufficient water.

“With this law and the rebound in housing development, the demand is moving in their direction,” Kosmont said.