Las Vegas Sun

March 28, 2024

Some say BLM land valued low for latest auction

The Bureau of Land Management has appraised more than 2,700 acres of undeveloped desert land to be sold at its November land auction for $361.2 million -- far less than what some developers had expected.

The federal government will put up 2,723.49 acres at the Nov. 6 land auction, to be held at Sam's Town Live, 5111 Boulder Highway, the agency said Thursday.

"This should get a lot of people interested in the auction, which is a very good thing, and we will see where the competition will take it," BLM spokesman Phillip Guerrero said. "We have eagerly been awaiting these numbers and so have a lot of other people in Las Vegas."

Land in some parts of the valley in recent months has sold for $300,000 an acre, industry experts said. Improved land, or land served by utility and government services, is being sold in some areas for $500,000 or more an acre.

At the federal government's June 5 land auction, 995 acres of land sold for almost $100 million more than the appraised value, with a total sale of $230.82 million, or almost $232,000 an acre, Guerrero said. The land had appraised at $132.26 million, or roughly $133,000 an acre.

Appraisers priced the land for the upcoming Nov. 5 auction, which will be the BLM's largest offering of land to date, at an average of $132,640 an acre. The land to be auctioned is 5 acres less than previously announced because an error in listing a parcel was discovered, Guerrero said. That acreage should have been listed as two parcels of 2.5 acres; it will be relisted and sold at a May 2004 land auction, he said.

Three parcels included in the 2,723 acres have received most of the attention.

The first parcel, 1,940 acres near Henderson, was appraised at $250 million, or $128,866 an acre. Another 115 acres near Henderson was appraised at $17.25 million, or $150,000 an acre. Near Del Webb's master-planned community, Anthem, the government plans to auction off some 482 acres, which was appraised at $66.5 million, or $137,900 an acre.

The remaining 56 parcels, ranging in size from 2.5 acres to 30 acres, are scattered throughout the valley.

"In today's market, those averaged rates are very low and it is extremely lower on a gross acreage standpoint," said Bill Hoover, Nevada division president of Pageantry Communities. "People are paying double that for land."

Jim Zeiter, owner and managing partner of Insight Development, predicted the smaller parcels will go for much higher than the appraised values.

"Some are closer to the city and there is just the pressure on land prices," he said. "The 1,900 acres, a lot of it is mountainous and the infrastructure is so far away from the property, I wouldn't be surprised if the appraisal is closer to what it will actually go for."

Hoover said there is some issue as to how much of the 1,900 acres is actually usable. He said the city of Henderson will require a significant amount of community infrastructure on the land, which would ultimately reduce how much developers can pay for the land.

"I doubt the entitlements will be so significant that it would keep someone from making a minimum bid," he said.

Hoover said he probably won't bid on any land, but will attend the auction to watch.

"I wouldn't miss it. It's got entertainment value," he said.

Zeiter said he won't bid on the large parcels, but he may bid on some of the smaller lots.

"The smaller stuff gives us an opportunity again," he said. "Before, only a few people could write checks that size. It's good for the community."

Local development company Focus Property Group made national news when it came out the high bidder at the last two federal land auctions.

At the June 5 auction, Focus Property Group paid $113.5 million for 485 acres in the northwest, or about $234,000 an acre. The land was appraised for $58.2 million.

At the November 2002 government auction, Focus paid $159 million for 990 acres of land in the southwest valley. The acreage, made up of three parcels, was appraised at about $81.8 million.

Mountain West Associates, a company sharing the same executive officers as local developer Olympia Group, bought a 248-acre parcel in southwest Las Vegas for $62.6 million. The land was appraised at $34.1 million.

Guy Inzalaco, principal of the Olympia Group, said he was surprised at the $250 million price tag on the 1,940 acres of land south of Henderson.

"To pay $250 million for one piece of property, and if something goes wrong in the marketplace, that's a big number," he said. "On the smaller parcels, I can understand why there may be some confusion that the (appraisal) is lower than expected, but on the bigger pieces, there's not a lot of room for error."

Inzalaco said he will probably bid on land at the auction.

"We're going to take a hard look at it. I thought the numbers were going to come in a little less and we will have to look at the infrastructure numbers," he said. "I think we'll be there, I'm just not sure what our final number is."

Merv Boyd, BLM assistant field manager of land sales and acquisitions, said the appraised values are calculated after appraisers look at recent land sales around the valley and evaluate the parcel to be put up for auction.

"The appraisals on these parcels reflect trends similar to sales in the valley," he said of the 2,723 acres to be auctioned off in November.

By law, the agency must appraise the land and then sell it at no less than fair market value, Boyd said. The appraisal is the minimum acceptable bid, he said.

The appraisals were done by contract appraisers, and were then reviewed by the chief Nevada appraiser for the BLM, Boyd said.

Since the federal government began auctioning land around the Las Vegas Valley in 1999, it has collected more than $723.4 million, Guerrero said.

Of the money raised, 5 percent goes toward education statewide, 10 percent goes toward the Southern Nevada Water Authority and the rest goes to environmental and recreational needs throughout the state. Of the money raised, 78 percent has been approved for use in Clark County alone, Guerrero said.

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