Las Vegas on the block

Friday, Nov. 5, 1999 | 11:09 a.m.

With all the tension and drama of a high-stakes poker game, the federal government sold off more than 162 acres of urban real estate Thursday.

Bidding was often intensely competitive as the Bureau of Land Management auctioned off 23 parcels in the Las Vegas area that ranged in size from a little over an acre to more than 42 acres.

Several developers squared off against each other during the bidding process, and some parcels drew "jump bids" of almost $10,000 -- a practice seen at the bid auction houses when a bidder wants to scare off competitors. The jump bids, however, failed to work, as competition just restarted from the higher plateau.

A federal General Services Administration auctioneer, Michael Graham from Atlanta, guided the competitors through the bidding. He occasionally chided reluctant bidders for failing to come up with "lunch money" to match opposing bids.

The take from the auction: Just shy of $9.5 million.

The sale was the first of a new program, mandated by Congress in 1998, that ultimately will sell off 27,000 acres of BLM land throughout the Las Vegas Valley. The BLM has embraced the sell-off, using a new competitive and open bidding process that agency officials hope will avoid accusations of cronyism or poor management that have been leveled in the past.

Most of the land sold Thursday was in a swath on the south side of the valley extending along the Las Vegas Beltway, south of Windmill Lane and west of Spencer Street.

While many of the buyers were developers, at least one parcel -- a 1.25 acre plot at the southwest corner of Cougar Avenue and Caliente Street -- went to someone who wants to build a home. Las Vegas attorney William Martin said he bid an "appropriate value" of $89,000 for the land where he plans to build his family's home.

The land was appraised at $62,500. Even so, Martin's bid made the land one of the least expensive properties that came up for sale.

Leo Durant, who represented developer LND Construction at the sale, was one of those who did not win a bid at the sale. He dropped out just before the closing bid of $305,000 for a 1.25 acre parcel at the southeast corner of Maryland Parkway and Wigwam Avenue.

LND Construction would have built multifamily housing, perhaps condominiums, on the land, Durant said.

"I though it was an interesting process," he said. "Some of the bids went very high."

Durant said he will be back for the next auction scheduled June 4.

Only three parcels failed to win any bid. One parcel, a 12.5-acre plot at Buffalo Drive and Summerlin Parkway, was withdrawn from the bidding.

BLM Land Manager Rex Wells said a protest to the sale of the property, valued at nearly $2.3 million, forced the agency to withdraw it from bidding.

The unnamed protester has a legal right to make the protest, and the BLM can dismiss the objection, but then the protester has 30 days to appeal the BLM decision, Wells said.

He said the protester wants the BLM to sell the land using an alternative sale formula that would restrict the number of bidders -- and would likely also reduce the amount that the BLM would recoup, Wells added.

The BLM could sell the land to a prearranged buyer through direct sale, through a call for a limited number of bids or through the open process used Thursday, Wells said. The agency prefers to use the third method, he added.

The BLM will likely reject the protest and put the tract up for sale again during the next auction, said Jean Rivers-Council, BLM associate state director.

Rivers-Council said the bureau will review what worked, and what didn't work, at Thursday's bidding, and make any necessary adjustments before the next auction.

She and BLM Las Vegas Manager Mike Dwyer said the parcels that didn't sell could be reappraised or cut into smaller pieces for sale.

The overall reaction from bureau personnel -- and from local and regional agencies that will benefit with dollars raised in the sale -- was positive.

Pointing out that several pieces of land received double or triple their appraised value, Rivers-Council said the auction was successful.

"What this illustrates to me is that there's a high level of interest," she said. "Clearly, there's a market out there."

She said Interior Department Secretary Bruce Babbitt, her boss, was keenly interested in the sale's results.

Rivers-Council also said the people of Nevada are the winners in the sale. The 1998 law that created the BLM land disposal area -- essentially, areas in or near already developed properties within the valley -- gives 85 percent of the sale proceeds to buy environmentally sensitive land in Nevada, with an emphasis in Clark County, and to pay for improvements to public lands.

The Southern Nevada Water Authority will receive 10 percent and the remaining 5 percent goes to the state education system.

When all 27,000 acres are sold, the BLM expects to recoup $500 million to $1 billion.

Although most of the money from the sales goes to environmental needs and the land sold is within the urban perimeter -- an area that environmentalists would prefer developed over land on the outskirts -- at least one environmentalist has raised an objection to the BLM land sale.

Robert Hall, chairman of the Nevada Environmental Coalition, has filed a federal lawsuit that could entangle title transfers to the successful bidders. He argues that the federal government did not do adequate environmental assessments on the final uses for the acreage sold.

Hall said the reason that air pollution is a problem in the Las Vegas Valley is that environmental assessments haven't been properly done in the past, and the public hasn't had a chance to comment on land-use plans.

Hall has filed numerous lawsuits against federal, state and regional governments.

Wells said the BLM did full environmental assessments and that the lawsuit won't pass muster in the federal courts.

He said the land sale was authorized by federal law and the law supersedes other requirements for federal land sales.

U.S. Sen. Richard Bryan, lead sponsor of the law authorizing the public auction, saluted the sale.

"Thursday's auction is the first concrete step that will ensure Nevadans reap the benefits of federally owned land being sold in the Las Vegas area," Bryan said in a news release.

His Democratic partner from Nevada, Sen. Harry Reid, echoed Bryan.

"I cannot think of three better uses for these proceeds than improving education, preserving Nevada's environment and helping the Las Vegas Valley meet its water needs," Reid said. The open bidding process "lets everyone involved see for themselves that we are receiving fair value for selling land that belongs to the taxpayer."

Reid has introduced legislation that would sell other public lands within the state in a similar fashion.

"The success of Thursday's auction should help me in convincing my colleagues that we need to pass this legislation right away," Reid said.

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