Editorial: BLM needs policies for its auctions

Wednesday, Nov. 12, 2003 | 8:57 a.m.

For the most part the Southern Nevada Public Land Management Act of 1998 has proven to be a godsend. The act requires that proceeds from the sale of federal lands in Nevada be dedicated to projects within the state. The land is sold through auctions, which often produce sale prices well above the parcels' appraised values. There are critics, such as those who say the federal land should not be sold. Sales fuel development, they say, which diminishes air quality and brings more people to an area already short on public services.

We side with the majority view, however, which is that the land sales are a boon to Southern Nevada because of the revenue that becomes available for badly needed infrastructure improvements. Ten percent of the proceeds automatically go toward improving the water delivery system and 5 percent go toward the needs of the Clark County School District. The rest of the money goes to other projects. Last month, for example, federal officials allocated $385 million from recent land sales. Parks, trails, forests, recreational areas such as Red Rock Canyon and Lake Mead, wildlife habitat, sensitive environmental areas and educational programs will all benefit from the money.

There is one administrative area of this act that is decidedly inept, however. Since the Bureau of Land Management began holding the land auctions in 1999, 15 winning bidders have failed to come through with the money. Their high bid was awarded, but later, after the auction, all they produced were excuses for not paying. In the most recent auction, on Nov. 6, for example, five bidders defaulted on six parcels. One said she bought the wrong parcel. Another said a courier disappeared with his money. The defaults represented 15 acres that brought a total of $4.3 million in high bids.

It's highly aggravating to us that many of the 15 people who have defaulted on their bids were people who had defaulted during previous land sales. The Bureau of Land Management has only been conducting the sales for four years, so perhaps some start-up problems can be forgiven -- but only if policies are adopted to prevent the problems from recurring. Strict rules should be applied against anyone with a history of even one default, such as limiting their bids to money they have on deposit.

The BLM is considering adopting a deposit policy, something that hindsight tells us should have been in place from the start. We suspect many bidders who defaulted, with nothing to lose, were simply driving the price up for competitors. They also could have been taking advantage of a BLM policy that allows any land that doesn't sell at a live auction to be sold at an Internet auction. Because winning bids at Internet auctions are almost always lower, bidders may have been defaulting only to bid again on the Internet. A deposit policy, and a policy of never selling land on the Internet that was offered at a live auction, are necessary. Defaults are costly to the public and there should be policies in place designed to guard against them.