NLV site goes for $47 million: Master-planned community to be developed

Thursday, May 10, 2001 | 11:01 a.m.

The going price for almost 2,000 acres of empty desert in the Las Vegas Valley?

On Wednesday it was $47.2 million.

Spirited bidding at a Bureau of Land Management auction pushed the price for 1,905 acres in North Las Vegas past the minimum of $40 million. It is part of 7,500 acres in the north part of the valley the agency will turn over for development.

The auction bidding pitted some of the country's biggest developers against each other. In the end, it was a partnership of Del Webb Corp. of Phoenix and American Nevada Corp. of Las Vegas that won the right to develop the valley's newest planned community.

Las Vegas-based Olympia Group, headed by Southern Highlands developer Garry Goett, dropped out after about a half-hour of bidding.

Del Webb and American Nevada, which is owned by the Greenspun family, owners of the Las Vegas Sun, can begin designing the newest master-planned community for the region. Restrictions in place with the BLM and the city of North Las Vegas require the companies to build a master-planned community.

Both companies have experience building such communities, which merge thousands of homes with commercial, recreational, educational, civic and religious venues for the residents. That model will be similar for the new project, American Nevada Chief Operating Officer Phillip Peckman, said.

American Nevada wants to repeat the success it has had in Green Valley, which covers 8,400 acres in the southeastern part of the Las Vegas Valley in Henderson. Del Webb is looking to repeat the success it has had building upscale communities in Summerlin and Henderson, Peckman said.

The companies have equal stakes in the deal, but American Nevada is the managing partner, officials from both companies said. Both companies will now negotiate with North Las Vegas to draft a basic agreement on what the company will put on the land.

The partners have 30 days to agree to the terms with the city, or the next highest bidder -- the Olympia Group -- will win the right to try to draft an acceptable agreement.

"Now we have to go the last 10 yards to the goal line," Peckman said. "It's not over yet."

It may be months before homes start to go up on the property, and the investment of $47.2 million is just a start.

"It's a tremendous real estate transaction," said Ron Tiberti, a prominent Las Vegas Valley developer who bid on the property but dropped out after the price reached about $43 million.

The area's booming population means the homes will be sold, he said.

"If the growth rate stays what it is, those tracts will barely, barely, barely meet the demand," Tiberti said.

The land has the advantage of being in one block, so it is easier to develop. It also is close to utilities and freeways.

But the development has some negatives, Tiberti said. The soil in the area needs to be examined and flooding could be a problem.

The winning companies also face what Tiberti predicted will be an arduous period of negotiations with North Las Vegas officials. And above it all, the companies will have to invest millions more for roads, water and sewer service.

Tiberti said the roads and utilities will likely be $40 million to $60 million.

North Las Vegas Mayor Michael Montandon put the infrastructure costs at closer to $100 million.

The companies' investment isn't risk free, officials from both companies said.

"It was high at (the minimum bid of) $40 million," Del Webb Senior Vice President Frank Pankratz said. "We have a lot of work to do with the city of North Las Vegas."

But Montandon said his city's planners have already been working on the rough outlines of the development agreement.

"We're not going to be starting from scratch, but the hard work is ahead of us," he said.

Peckman said the companies will design some affordable housing for lower-income families into the community, but the main focus will be on the solidly middle- and upper-income homes that the companies have provided in other parts of the valley.

North Las Vegas officials have estimated the land will average four to five residences per acre, easily allowing 6,000 new homes plus hundreds of supporting businesses.

"What it means is tax dollars, reputation, an upscale community," Montandon said. "It's a quality of life issue."

Of the 1,905 acres, about 500 acres will be set aside for public use. Another 100 acres will be set aside for the construction of a new highway through the area. That leaves only about 1,300 acres of developable land.

Early plans call for a master-planned community with commercial areas, an age-qualified component and traditional single-family homes, American Nevada said in a press release.

Jacquelin Risner, North Las Vegas community development director, said the focus on development will be residential. No large industrial projects will go in the 1,905 acres, she said.

But the partners developing the new community have the option of building a casino -- with the approval of the North Las Vegas City Council. Risner said the companies and city officials have not had any discussions on a possible casino.

But there are no legal restrictions to building one, she said. Senate Bill 208, a law passed four years ago to restrict the spread of neighborhood casinos, make it difficult to build a new casino within 1,500 feet of existing residences. The companies could easily site a casino without triggering the law within their new acreage.

"We'll be talking to North Las Vegas about that (building a casino)," Peckman said. "Part of the appraised value of the land was obviously based on that potential."Under the agreement terms that North Las Vegas planners want to see, the companies will bear almost all the development costs. But millions in property taxes and franchise fees will swell the city's income, city officials hope.

Montandon said the development will not leave lower-income residents of North Las Vegas behind.

The dollars generated by the development will help fund new fire and police services "to help the entire city," he said. "That's a very good thing."

The sale and the construction of the Las Vegas Beltway, which is going through the heart of the property, will spur more development that will radically transform the area, one observer predicted.

Roger Patton, senior vice president of engineering consultant Louis Berger, is studying the transportation needs of the northern valley for the Nevada Department of Transportation.

Expect many more people, homes and jobs for the area, he said.

"North Las Vegas is already in high gear," Patton said. "This is just going to keep the momentum going.

"The beltway is coming sooner rather than later, and will run right through the heart of that 2,000 acres," he said.

By 2025, development will likely bring 210,000 new residents to North Las Vegas, which now has about 120,000 people. Patton said perhaps 225,000 people will live in the city of Las Vegas in adjacent areas.

Nearly 20 percent of the valley's total population will live north of Alexander Road by 2025, Patton said. Tens of thousands also will work throughout a belt from Interstate 15 to U.S. 95.

"Those are big numbers," he said.

The federal agency that looked after the north valley land for decades should be out of the picture by then. The remaining 5,600 acres of BLM land between the highways will be sold in the coming years.

Unless the companies and North Las Vegas fail to reach an agreement, the BLM's role in managing the 1,905 acres is now over, said Mike Dwyer, BLM land sales manager.

Still, it will probably be years before the sale can be called an unqualified success.

"A success? Ask me in three years," Dwyer said. "What I want to see is a real nice master-planned community. That's our real goal here -- to increase the capacity of North Las Vegas to become a great city.

"I'm delighted it sold to a good, strong developer."

Under a 1998 federal law, the BLM is to sell 27,000 acres of land for development in the Las Vegas Valley. Much of that land is being sold in smaller parcels, anywhere from half an acre to dozens of acres.

Before the $47.2 million sale, 16 smaller parcels scattered throughout the valley received a total of $11.2 million in successful bids.

Under the law, money from both the large sale and the smaller sales will go to Nevada. The money goes to buying environmentally sensitive land, protecting existing federal conservation areas and building infrastructure in parks and other federal lands.

Local governments also get 15 percent of sales revenue for water projects and schools under the law.

While North Las Vegas's newest master-planned community may be the newest such community in the valley, it isn't likely the only one to come in the years ahead. The BLM still has several large parcels to sell.

At least two of those will be next door to the parcel auctioned Wednesday. The BLM still has the 5,600 acres in North Las Vegas, which city officials also hope will become master-planned communities. The timeline of the sale of that land hasn't been established by the city and BLM.

But the BLM has tentatively scheduled a sale of at least part of 6,000 acres of Henderson land for a year away, Dwyer said. He said the land will probably be sold in similar-sized chunks of about 2,000 acres.

Developers are already eyeing that next large piece of land. Peckman, of American Nevada, said his company will be at the auction.