BLM Land Sale Near Vegas Looks Like a Win-Win Bet
It’s hard to say who was the biggest victor Wednesday when, at a public auction with poker-faced bidders, the government sold $47.2 million in land so that more homes can be built farther into the desert.
Much was at stake for the nation’s fastest-growing metropolitan region, which is encircled by land owned by the U.S. Bureau of Land Management.
The city of North Las Vegas, long derided as the valley’s ugly duckling, hopes the 1,905-acre parcel within its boundaries will sprout its finest--and still relatively affordable--residential neighborhoods.
The developer is thrilled that, in a valley where new residents constantly pour in, it has a place to build more than 5,000 homes--and the stores, roads and parks to serve them.
Environmentalists are satisfied because the land sold Wednesday was not of significant natural value, and a big portion of the sale’s proceeds will finance the purchase of several thousand acres of environmentally sensitive land elsewhere in Nevada.
Finally, the BLM may be the most elated of all, because Uncle Sam seems to have sold it fairly and without the controversy that has clouded its past land sales.
Las Vegas can only grow when the U.S. government allows it. If developers could not buy BLM land, the value of the existing private land stock would escalate, jeopardizing the ability of Las Vegas’ legions of blue-collar workers to find affordable housing.
That’s why the tension was palpable Wednesday, with competing developers prepared to write $8-million-plus deposit checks and holding yellow bidding cards. The bidding started at $40 million--the appraised value of the land--and, 20 minutes later, ended nearly 20% higher. The successful buyer was a partnership between American Nevada Corp. and the Del Webb Corp.
“We’re running out of residential land, so this auction is very timely for us and plays into our plan to continue in this business,” said Phil Peckman, chief operating officer of Greenspun Corp., parent of American Nevada.
The sale of government land to private developers has long been a testy issue--especially in Nevada, where 87% of the landscape is owned by Washington--and taxpayers may have lost millions of dollars in past land sales.
The U.S. government became Nevada’s biggest landowner when the state entered the union in 1864 and the bulk of its land, eschewed as worthless by settlers, ended up in government hands by default.
Slowly over the decades, speculators and land developers have nibbled away at the desert, making the Las Vegas metropolitan region what it is today.
But over the years, the BLM has been targeted with stinging criticism by government auditors for selling or trading land to developers at less than fair value.
Among the issues: By the time sales were finally completed after years of bureaucratic entanglement, the land was more valuable than its initial appraisal. The buyer could immediately sell it for a huge profit that otherwise could have gone to the government.
In other cases, developers have bought environmentally sensitive land elsewhere and then traded it to the BLM in exchange for the more urban land it lusted. Government inspectors reviewing four Nevada land swaps in 1996 concluded, for instance, that taxpayers lost millions of dollars in those deals, which were executed without involving competing developers.
In 1998, Congress crafted a process to deal with Las Vegas’ unique development pressures. It instructed the BLM here to auction off its most urban land at the request of local jurisdictions that wanted to expand and where developers were waiting in the wings.
Such auctions--with fresh fair-market appraisals and developer competition driving the bidding even higher--are considered the best way for the government to get a fair price.
In five auctions since November 1999, excluding Wednesday afternoon’s sale, the BLM has sold 479 acres of land--mostly in the already-developed Las Vegas area--for $60 million. Wednesday’s sale was the largest ever for the BLM.
“The auction format allows the open market to set the price of these lands--which is especially critical in a place like Las Vegas where the market is so speculative,” said Mike Dwyer, a BLM manager. “As long as there is competition for the land, we know we can walk away feeling comfortable that we sold the land for what it’s actually worth.”
The BLM has identified about 52,000 acres in the valley it no longer wants. Of that, about half will be reserved for public recreational uses or earmarked for highways, flood control and other public infrastructure. The other 27,000 acres ultimately will be sold, in piecemeal fashion, to the highest bidders. Next on the BLM’s auction list is about 2,000 acres south of Las Vegas, to be sold next May.
In North Las Vegas, the BLM will ultimately dispose of 7,500 acres. But rather than sell it all at once--at a price so high it might dissuade competitive bidding--Washington ordered that it be sold in smaller pieces that will attract more bidders pumping up the price.
“We know this [development] will be life changing for the city,” said Jacque Risner, the city’s manager of economic development. “It will take North Las Vegas from the image of a stepchild and show that we are a viable, vibrant community on our own and not just an adjunct to Las Vegas.”
But more is at stake than new homes and parks in North Las Vegas. While the BLM intends to ultimately release thousands of acres to accommodate the valley’s growth, developers say they depend on a steady supply of government land to preserve the current, relatively cheap land prices.
Benefits will accrue outside of urban Las Vegas too. Unlike BLM sales in the past, when the proceeds were sent back to Washington, the money made from auctions here now will stay in Nevada.
Profits from Wednesday’s sale--the largest land auction in BLM history--will fund the purchase of about 4,000 acres of privately owned land inside U.S. Forest Service and National Park boundaries in the state.
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Las Vegas Valley Land Sales
The federal Bureau of Land Management on Wednesday sold a 1,905-acre parcel of land at a public auction. Because the Las Vegas Valley is surrounded by government-owned land, outward development occurs only when the BLM sells land to developers.
Source: Clark County GIS Central Repository
