Boulder City cashes in on land leases

Greg Harman

Saturday, Sept. 9, 2000 | 2:56 a.m.

"Boulder City is not expected to become a big city. But small as it may be it is expected to become an object lesson in the planning of cities." -- S.R. DeBoer, quoted in

American City magazine, 1931.

When the federal government divested itself of its Utopian experiment in 1959, a former camp for Hoover Dam workers known as Boulder City, it unleashed a bitter contest between the town's business interests and its comfortably small-town citizens.

Over the years the rivalry has extended to innumerable fronts, but growth issues have usually fueled the fight.

And while the slow-growth advocates have won many other important victories strengthening the town's growth ordinance -- evidenced in the city's need for a majority popular vote just to sell more than a single acre of city-owned land -- the town's commercial activity is experiencing an unprecedented growth spurt, and all of it is happening on city land.

With about 200 square miles of city property (making one of the smallest towns in Southern Nevada the largest municipality in the state), Boulder City in recent years has been able to strike several lucrative land lease deals to supplement its budget.

And the reliance on that lease income is about to increase.

A slew of golf courses, either preparing to open or preparing to break ground, and a new power plant on city-owned land have already started contributing millions to the town's operating budget. And talk continues about proposals for a second power plant and a renewable energy demonstration center on city property.

But in terms of population, Boulder City has waited out the population boom that has washed across the Las Vegas Valley below in the last 20 years. As Henderson exploded from 23,000 residents in 1980 to approach 200,000 this year, Boulder City creeped up by only 5,000 residents, bringing it from 9,500 residents in 1980 to about 15,000 this year.

A controlled growth ordinance that limited residential development to 120 housing units per year was approved by voters in 1979. That vote aggravated the City Council at the time and inspired several city officials -- including the city attorney -- to resign in protest.

As a new councilman 20 years ago, Boulder City Mayor Bob Ferraro said he wasn't sure where he stood on the original initiative petition. But in hindsight, he is certain about the vote's impact: "It saved our town. It saved us."

Even though newer developments approaching the shores of Lake Mead have an element of the impersonality inherent in the master-planned communities thriving in Henderson and Las Vegas, the town's center still feels like it just stepped out of the 1950s.

Boulder City's boutiques, diners and curiosity shops intersected by narrow streets are permeated by an aura of permanence: a flavor of small-town escapism settled in the hills overlooking the fast and sometimes furious neon jungle below.

Expectedly, the sweeping commercial changes now under way have brought a certain level of trepidation among residents.

"Most people would prefer we didn't do anything," said Gene Segerblom, a third-term state assemblywoman from Boulder City. "We want to be left alone. We don't want to be included in a lot of things."

That attitude is reflected in one of Segerblom's primary tasks as a state representative: keeping an eye out for any references to Boulder City in the bills her fellow representatives introduce -- and then setting about removing them.

But attitudes notwithstanding, the landscape around Boulder City is changing. Slow-growth measures have kept property values artificially high, bringing in more affluent homeowners who have begun asking for better parks and greener streets.

After all, as the landscaping along Henderson's busy streets begins to fill in -- covering many of its construction scars -- it increasingly resembles its own adage, "A place to call home." And it hasn't been lost on Boulderites that salaries are higher 10 miles down the hill.

To help provide for the park and landscape services Boulder City has turned to one of its greatest assets: its land.

MGM Grand is expected to open its exclusive high-end golf course on the town's western edge next month. El Dorado Energy, a partnership of Sempra and Reliant energy companies, went online earlier this year with a gas-fired power plant in the Eldorado Valley. A second plant is now being negotiated with the city.

The only homegrown enterprise in the bunch, Red Ridge LLC, is expected to break ground on 160 acres of city property for yet another golf course next month.

As the lease money increased -- from $135,000 in 1997 to $1.4 million this year -- the town's landscaping budget jumped from $11,000 to $700,000 and the council approved a $3 million city park.

But projections -- which include MGM, El Dorado and Red River yearly lease payments rising to a collective $1.7 million in fiscal 2003 -- suggest the city's expenses will begin to outdistance its available revenue.

To reverse course the town will need to cut its services unless it is able to secure new lease tenants.

As City Manager John Sullard likes to say, leasing offers the "only revenue resource we can control."

The town's share of the consolidated state sales taxes bring the town 44 percent of its current income, about $6 million of its $14 million annual revenue. But city officials fear that number could shrink when the Legislature convenes next year, causing the town to scramble to replace the lost revenue.

Meanwhile, a movement is afoot to strip the city of the authority to strike these leasing arrangements.

City Councilman Bill Smith is preparing to introduce an initiative petition that would require a supporting popular vote for any significant leasing agreement to be approved.

The move would follow a successful initiative petition three years ago that made all city land sales exceeding 1 acre subject to popular approval. Leases had been a part of that proposal but were later stripped away.

"If, in fact, the people in Boulder City want control of their destiny, they'll have to be able to control leases as well as land sales. Right now they don't," Smith said.

"Leasing land in most cases is far preferable to selling it. But that doesn't mean it should be done willy-nilly."

Slow-growth advocate Bill Ferrence agrees with Smith.

"Although it's still the greatest place I've ever lived and the place I want to spend the rest of my life, growth has had a negative impact," said Ferrence, manager of the Boulder Dam Credit Union. "Our biggest and best asset should not be entrusted to three people -- whoever they are."

It currently takes a majority vote of three of the five City Council members to approve a lease deal.

But Mayor Ferraro opposes the position, saying it "doesn't make sense" for Boulder City. And Sullard suggests it could put a stranglehold on city business.

"We are the main landowner here. There are no private holdings that are of any significant size," Sullard said.

In all of its 200 square miles the town boasts less than 169 acres of undeveloped private lands that have not already been subdivided.

Smith agrees with his peers that leasing is the way to go, and believes voters -- had they been invested with the responsibility -- would have approved leases for both the MGM golf course and El Dorado Energy.

As Sullard points out, because of the city's lease agreement, the MGM golf course will revert back to city control in 70 years.

"Whoever's around then, and it won't be me, will get one of the best dang golf courses around," Sullard said.