Builders teaming to bid on BLM land

Jennifer Shubinski

Thursday, Feb. 27, 2003 | 11 a.m.

Four major Las Vegas-area developers said Wednesday they're teaming up to bid for undeveloped federal desert land at upcoming Bureau of Land Management auctions.

Affiliates of American Nevada Co., Pulte Homes Inc., KB Home of Nevada and Lewis Land Co. of Nevada announced a joint venture agreement to purchase land at the June and November BLM land auctions for development of master-planned communities throughout the Las Vegas valley.

"I think because the price of the land is getting to be a lot more than it was even a couple of years ago, that we thought it might be a lot easier if we all take a smaller piece of it and bid together," said Phillip Peckman, chief operating officer for The Greenspun Corporation, parent company of American Nevada.

Land prices soared to about $160,000 an acre at November's BLM land auction, at which Focus Property Group pushed the final price for 992.5 acres to $159.1 million.

The land had been appraised at $100,000 an acre, Mark Morse, field manager for the BLM, said.

At least 3,470 acres are scheduled to be auctioned by the BLM on June 5 and Nov. 6.

The land to be sold at the June 5 auction includes about 800 acres in the northwest Las Vegas area, roughly 200 acres in the southwest and scattered tracts throughout the valley, Morse said. The Nov. 6 auction will include about 2,500 acres in the Henderson area including a 500-acre tract near Anthem, and scattered tracts throughout the valley, he said.

The land coming up for auction this year will be appraised next month, with the results released in early April, Morse said.

As the price of land stays at record prices, more partnerships between companies will be formed, said Dennis Smith, principle of Home Builders Research Inc.

"Land prices are so high, it's tough for one company to come up with that kind of money," Smith said.

Partnerships will probably also be formed to buy small land tracts, especially if the appraised value of land remains at about $100,000 Morse said.

"Not a lot of companies want to jump into that," he said.

American Nevada, KB Home, Pulte and Lewis plan to include other merchant builders in their developments.

But they will undoubtedly face challengers bidding for the BLM land, Smith said.

"I'm sure they (Focus Property Group) will go in with a partner or partners," Smith said.

John Kilduff, president of American Nevada, said he hopes the partnership will give the four companies an advantage.

"We hope to be a formidable opponent at the auctions," he said. The four companies are interested in all the land being auctioned off by the BLM, but in particular in land near the Southern Highlands community in the southwest and the land being auctioned off in northwest Las Vegas, Peckman said.

All four companies, if they have the highest bids at the upcoming auctions, will be equal owners of the land while American Nevada would manage the developments, he said. The group expects to invest at least $100,000 in land studies before the auctions, a cost that is to be shared equally among the companies.

This is not the first time American Nevada has entered into a partnership to help it acquire land in the Las Vegas area.

In May 2001, American Nevada partnered with Del Webb Corp. in a successful bid for 1,905 acres of BLM land in North Las Vegas. Pulte later acquired Del Webb.

That parcel is being developed as the Aliante master-planned community, which will encompass about 7,500 homes, including an age-restricted development of about 2,000 homes.

If successful at the upcoming land auctions, the four companies plan to take the master-plan community concept to another level, Kilduff said.

"Every one of these partners brings something to the partnership to make it very unique and that we can all benefit from," he said.

Pulte and KB are aggressive in developing non-age-restricted communities, Del Webb has been the leader in age-restricted communities with its Sun Cities and Lewis is a leader in multi-family development, Kilduff said.

"With the combined experience, expertise and capital of the venture partners, we are in a position, if successful at the public auctions, to develop some of the finest master-planned communities in the country," said Steve Petruska, area president for Pulte.

The partnership brings together some of Las Vegas' -- and the nation's -- largest home builders.

KB Home is the largest home builder in the Las Vegas Valley, delivering 2,959 homes locally in 2002. Pulte Homes Inc. and Del Webb collectively delivered 2,119 homes in the Las Vegas area in 2002, ranking Pulte No. 2 in the market.

Las Vegas-based Lewis Land Co. of Nevada is a privately held company involved in developing planned communities, apartment communities and shopping centers throughout Nevada and California. In 1999, Lewis sold its home building company, Lewis Homes, to KB Home.

Besides Aliante, American Nevada developed the Green Valley, Green Valley Ranch and Seven Hills communities and has a big commercial portfolio including shopping and office properties. The Greenspun Corporation is owned by the Greenspun family, which also owns the Las Vegas Sun.