Development giants American Nevada, Del Webb team up to bid on BLM land

Thursday, Feb. 15, 2001 | 11:38 a.m.

Two of the largest residential developers in the Las Vegas area will join forces to bid on and develop a big chunk of Bureau of Land Management acreage in North Las Vegas.

American Nevada Corp. of Henderson, which developed Green Valley, Green Valley Ranch and the Seven Hills master-planned communities; and Phoenix-based Del Webb Corp. -- developer of the Sun City and Anthem communities in Summerlin and Henderson -- today announced the joint venture on 1,750 acres.

The BLM plans a May 9 public auction of the property, which experts say is worth close to $100 million. The 1,750 acres is the first phase in the development of 7,500 acres along the planned beltway freeway from Decatur Boulevard to Interstate 15. The initial 1,750 acres to be developed will straddle the future northern beltway and is roughly located between Centennial and Grand Teton Drive and between Decatur and Clayton Street.

The companies would be equal partners in the venture. American Nevada would act as managing partner, meaning that its executives would handle the day-to-day operation of the project.

Del Webb, which is in the midst of developing the Anthem master plan in Henderson, would bring its expertise in producing age-qualified communities to the table. The partners said other homebuilders would be invited to develop tracts of the property.

American Nevada is owned by the Greenspun family, owner of the Las Vegas Sun.

John Kilduff, president of American Nevada, said plans to collaborate with Del Webb began about a month ago.

"What was interesting was that he was trying to get ahold of me at about the same time I was trying to get ahold of him," Kilduff said of Frank Pankratz, senior vice president of Del Webb and the general manager of Sun Cities Las Vegas.

"We have a real regard for the way they do business and when we decided to seek a partner, they were the first ones that came to mind," Kilduff said.

A management committee comprised of members from both companies would be formed to make policy decisions that would be implemented by the American Nevada managers, Kilduff said.

The partners said it was too early to determine exactly how many houses could be built on the acreage, since plans have to be reviewed by the City of North Las Vegas.

However, by comparison, the acreage is larger than Sun City MacDonald Ranch, but smaller than Sun City Summerlin or Sun City Anthem. Pankratz said MacDonald Ranch uses about 600 acres, Sun City Summerlin has about 7,800 homes on 2,500 acres and Anthem is projected to have some 12,000 homes on about 5,000 acres.

Kilduff said initial plans for the land include development of three distinct villages, including an age-restricted component. That's where Del Webb comes in.

Its Anthem project incorporates a Sun City development for retirees as well as conventional housing in what the company calls a "lifestyle-based master-planned community."

Pankratz said residential development would be the primary focus, but there also would be some light commercial and retail elements to the plan. Pankratz and Kilduff said the development also would include generous amounts of parks, open space and a trail system to conform to planning and zoning mandates from the City of North Las Vegas.

Pankratz and Kilduff said they would meet with city officials soon to outline some of their plans.

One of them will be Mike Majewski, manager of economic development for the City of North Las Vegas, who left a similar position with the City of Las Vegas to work on development of the BLM land.

Majewski said the city is encouraging companies to develop their own plans for the property.

"We know what we want to see out there, conceptually, but we also know there are a number of details that the developers will have to work through, such as utilities and infrastructure," Majewski said. "We're very pleased with the response that has come in on this and, as far as American Nevada and Del Webb, these are companies that have the financial strength and experience to develop master-planned communities."

Executives with the two companies acknowledge there are several hurdles to clear before the first shovel of dirt is turned.

The first is becoming the successful bidder.

Mike Dwyer, manager of the Southern Nevada Project Office of the BLM, said the auction, which will be conducted at Clark County Commission Chambers, will be the first of its kind on such a large BLM parcel. The auction of the 1,750 acres will be the main attraction for an auction that will include 20 other smaller parcels.

Dwyer said the BLM will complete an appraisal of the land in March, which will be the opening bid price in the auction.

An auctioneer will then conduct the sale. Dwyer said at least six groups have expressed an interest in participating in the auction, and Majewski said about a dozen have been in contact with the city about the land.

Dwyer and Majewski said confidentiality agreements prohibit them from disclosing what companies have expressed an interest in the land, but real estate experts in the city have speculated on what companies would be capable of developing the acreage.

"You could probably take the list of the top five companies developing in the area now, they all have to be out there sniffing for an opportunity like this," said Keith Spencer, first vice president of CB Richard Ellis, Las Vegas.

Spencer said finding large undeveloped areas is "the name of the game right now," so he expects KB Home, formerly known as Kaufman & Broad, and Pardee Construction Co. of Nevada, to be at the top of the list.

KB, after merging with Lewis Homes, became one the top tract-home developers in the market. Pardee is has developed the Eldorado master-planned development at Ann Road and Camino al Norte, which is just southeast of the the 1,750 acres.

Michael Stuart, of the land division of Colliers International, Las Vegas, added American West Homes Inc., and Developers of Nevada, which is building Southern Highland in Henderson, to the list.

"It has to be somebody with deep pockets because in addition to having the successful bid, you also have to the means to connect the utilities and add the infrastructure before you even sell a home," Stuart said.

Stuart and Spencer said there could be out-of-state developers who may want to enter the Las Vegas market interested in bidding and there may be other joint ventures like the American Nevada-Del Webb proposal.

Another company that is speculated at being a player in the bid process is the Howard Hughes Corp., developer of Summerlin. However, Stuart said that company's focus has been centered more on commercial and retail properties and not residential.

He said Hughes -- owned by development giant Rouse Co. of Maryland -- could acquire the parcel, master-plan it and then allow other developers to build it. However, he said the company also may have its plate full with the development of new sections of Summerlin to the south and west of existing properties.

"I've heard lots of rumors, all kinds of crazy stuff," Stuart said. "I just know that the cost of utilities is going to be tremendous and who knows what the cost of the land will come in at?"

Majewski said few want to speculate on the cost of the land because they don't want to influence the BLM appraisal process.

"You have to understand that nothing like this has ever been done before," Majewski said. "This is the very first parcel in the United States to go this route. It's difficult enough to appraise a big chunk of land in the middle of the desert."

But Stuart offered some educated guesses.

He said a 148-acre parcel near the 1,750 acres is expected to sell for between $55,000 and $60,000 an acre. Although the experts say the volume of large parcels can drive down the price per acre, a 1,750-acre parcel at those rates would go for between $96 million and $105 million.

Once a winning bid is established, the successful bidder will have 30 days to finalize a contract with the city.

Kilduff and Pankratz said if their venture is successful, they would begin development of the land within a year and expect the first residents of new neighborhoods to move in sometime in 2003. The partners said they would evaluate their progress before making a decision on whether to bid on other portions of the BLM's 7,500 acres.

Majewski said the city is excited about the possibility of joint ventures putting in bids.

"It's great to see that they're sharpening their pencils and are serious about doing a good job," he said. "When they actually develop this out, it's going to be exactly what the community needs."

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