Tuesday, Aug. 19, 2003 | 11:14 a.m.
After nearly a decade and a half of work, 80 acres of land just east of McCarran International Airport is becoming an epicenter of future economic development in one of the older parts of town.
In an area roughly bordered by Russell Road, Burnham Avenue, Eastern Avenue and Patrick Lane, the Clark County Aviation Department and a private developer hope to begin construction of airport-related support buildings and retail centers at the end of 2004 or early 2005.
Airport officials and developers hope that the site will spur economic activity at McCarran and in the surrounding area. The site is perhaps the largest single tract available for development in an area first developed more than three decades ago, and which has seen some urban decay nearby.
Some observers, however, have questioned how appropriate it is for the airport to be the vehicle for that hoped-for investment.
Exactly what will be on the site is still being worked out, said Brad Schnepf, president of Marnell Properties, a subsidiary of Marnell Corrao Associates. Schnepf's company, which has the contract to be the 80-acre developer with the airport, is a Las Vegas construction company with offices next to McCarran.
"We're still in the early planning stages," Schnepf said last week. "We've done a lot of work on the site in terms of what is going there, what is appropriate.
"A little over half of it would be aviation-related uses. The other half would be support uses. We do have some significant interest from the retail sector."
Airport-related uses could include maintenance facilities, cargo warehouses, food services and other support for the airlines and other companies using the airport. On the retail side, a shopping center and other lighter commercial operations are envisioned.
The retail operations would provide a buffer between the heavier industrial businesses within the 80-acre parcel and the residential neighborhoods outside the project, Schnepf said.
News of the retail aspects of the development does not please Jennifer Woods-Bachman, one of the former owners of the 277 homes that the airport purchased through the 1990s to make room for the project.
"They said it was going to be for airport uses," Woods-Bachman said. "We though either runways or big warehouses or something."
Woods-Bachman moved into the home in the neighborhood with her parents in 1967. She moved out in 1990, although her ex-husband lived there for another five years.
"They forced the residents out for a shopping center," she said. "That took the property from private owners and they're turning it over businesses.
"If it were genuinely for the public good, I could understand it," Woods-Bachman said. "But for businesses?"
Randy Walker, Aviation Department director, said the project serves a public need. The purpose was never for the department to go into business as a commercial real estate broker, he said.
"We never buy land with the intent of putting it into commercial. We don't buy land for speculative purposes," he said.
But the airport is forced into the process for two reasons, he said. First, the airport does not want to sell the land for fear that someone, someday, might buy it and try to put residential back into an area that the Clark County Commission and airport planners have found inappropriate for homes.
And, Walker said, "we needed land long-term for airport industrial purposes." The airport planners find the commercial uses along the periphery of the project have a lighter impact than the industrial properties planned for the center.
"We didn't want the industrial uses pushed right up to the fences of the residences," he said, adding that it would have made the airport more money "to put industrial all the way to Eastern."
"Of course, when you look around the airport, what is there to buy? This is really the only piece left."
Airport officials point out that all 277 homes were purchased with a "willing buyer, willing seller" philosophy. The total acquisition cost for all the homes was more than $25 million. The department bought the last home in 1999.
Unlike areas in the Cooperative Management Area, a 5,300-acre swath purchased with federal funding because of noise concerns from takeoffs and landings, the airport paid for all of the property in the "Russell-Burnham" project. Walker said he does not expect the airport to easily recoup its investment in the land, but revenue from the expected leases on the 80 acres will go back into the airport's budget and defray other costs.
Ideally, revenue from the lease of land would help keep down costs to the airlines using the airport, and ticket fares to Las Vegas. That goal is important because visitors provide the economic lifeblood of the community, officials said.
Although the financial structuring of leases on the land is not finalized, Schnepf and Walker said it would likely to be similar to other airport projects, including leases in the Cooperative Management Area.
In those cases, the aviation department continues to own the land. The developer pays for the infrastructure and buildings. The airport typically gets 50 percent of the lease revenue.
"Our investment is the land. Their investment is everything else," Walker said.
Still, some developers and politicians continue to express reservations about the project and similar efforts by the aviation department. The concern generally has been that the aviation department's public ownership of the underlying land could allow the contracted developer to undercut private owners nearby, giving the government an unfair advantage and wounding private investors.
County Commissioner Mark James expressed similar concerns several years ago as a state senator.
"The terms of any lease or sale that they offer should be as close to fair market as would pertain to a private party transaction," James said.
He added that the airport officials have acted in the public interest to subsidize and support airport operations and eliminate noise-versus-homeowner conflicts.
Commissioner Rory Reid, who represents the Russell-Burnham area, said he has concerns about the government competing with private enterprise.
"If the airport is going to be in the property development business, we need to make sure at least there is parity with private interests," he said. "It has to be a level playing field."
It will be, according to Walker, Schnepf and developers not involved with the Russell-Burnham effort. The airport consistently leases at or even above the market rate for similar properties, said Rod Martin, vice president of Majestic Realty.
Martin's company is involved with similar development efforts in other areas with the airport.
Walker said the developer of the airport land has a profit motivation to charging as much as its neighbors. That will bring the lease rates into line with other similar properties and negate a government advantage, he said.
"The developer, for its own purposes, will charge whatever the market will bear," he said.
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