Another airport windfall reported

Launce Rake

Monday, April 4, 2005 | 10:43 a.m.

A property acquired by a pair of Las Vegas developers from Clark County for a whisker more than $8.7 million in late 2003 has been resold 14 months later for $32 million, a move that some observers said casts even more doubt upon the county's appraisal process.

The land is home to the Cactus Ridge Mobile Home Park on Richmar Avenue, near the booming section of Las Vegas Boulevard near Serene Avenue.

Dozens of residents of the park, who two years ago had the Clark County Aviation Department as their landlord, are concerned that the sale justifies their existing fears that they will soon be pushed out of their homes.

Residents, mostly retired singles and couples living on fixed incomes, own 193 homes in the park, a well-kept community just south of Serene.

The new owners, a limited liability company called Las Vegas Mobile 18 in the documents filed with the county, also manage the Oasis RV Park on Windmill Lane.

Employees at the office declined comment; they said owner Ray Koroghli would be unavailable for comment until later this week because of a death in his family.

The sale is the latest in a series of transactions that have taken the land from public ownership.

Howard Bulloch and partner David Gaffin acquired the land from the Aviation Department, managers of McCarran International Airport, in October 2003 as part of a sharply contested land swap. Airport officials have said then and since that they did not want to be in the business of managing mobile home parks.

The airport had become the landlord when it purchased Las Vegas Mobile Home Park and Treasure Lodge, two mobile home communities along Tropicana Avenue, through eminent domain in 1998. Unlike most deals affecting the airport, this one was not a "willing buyer, willing seller" situation. Airport officials said they needed the land because it was in the airport's flight path.

The residents on Tropicana Avenue did not generally oppose their relocation to Cactus Ridge, reasoning that the county would keep their rents stable and their homes safe. But with the transfer of the property in the 2003 swap, residents say their rents and other charges have gone up.

Now they fear that they will be pushed off the property, which is surrounded by new condominium and commercial developments.

Laura FitzSimmons, a Las Vegas lawyer, protested the 2003 swap. She also recently met with the residents of the mobile home park. She said the deal, which was consummated in December but only formally recorded March 25, shows that the county's appraisal process is profoundly flawed.

"The market here has gone crazy, obviously, but it hasn't gone crazy like that," she said. "What is that, about 400 percent?"

FitzSimmons said Bulloch's deal depended on an appraisal by Las Vegas appraiser Shelli Lowe, one of five appraisers used by the airport for evaluations of commercial property. Bulloch, who has done a series of land deals with the airport, consistently used Lowe as an appraiser.

"They (the appraisals) are all skewed towards Bulloch's favor. All of them," FitzSimmons said.

The issue of appraisals for airport land deals has come under scrutiny over the last several months following complaints from residents about a specific deal between the airport and local land broker, Scott Gragson. The airport suggested at first that the land in question would be limited to development as a cemetery, but the land was never restricted to that use and subsequently was reclassified for commercial use.

Since then, Metro Police, the Clark County district attorney's office, the FBI and federal officials have joined Clark County auditors in a probe of airport land deals.

The Bulloch deal on Cactus Ridge, however, was not included in the audit, which focuses on about 5,300 acres in what is called the Cooperative Management Area around the airport.

Assemblywoman Chris Giunchigliani, D-Las Vegas, has asked that the county expand its inquiry into deals orchestrated through eminent domain condemnations, as the mobile home deal began. The county declined that request, explaining that resources were focused on the issues of deals within the Cooperative Management Area, but is providing information of the other deals to Giunchigliani.

The legislator said she is concerned about the Cactus Ridge residents.

"These people could be displaced by this deal," Giunchigliani said. "I think it's shameful if this is a result of a process of conveying property for somebody's profit.

"I don't know that anything wrong has happened, but some of it starts to stress the smell test," she said.

Airport spokeswoman Elaine Sanchez said Friday that Aviation Director Randy Walker was out of town and unavailable for immediate comment. Walker has said airport officials are fully cooperating with the inquiry into airport land deals.

On the specific subject of Cactus Ridge, Walker has said the airport does not have an ongoing responsibility to the residents.

Sanchez, however, said residents were provided some degree of protection because the trade required Bulloch to respect the leases in place.

"We did the best we could legally do," Sanchez said, "including having a contract with Mr. Bulloch to not raise rents for residents."

As leases have expired, however, rents have started to rise. Other charges also are coming to the residents, including rapidly escalating property tax "pass throughs" to the residents.

Lowe, the appraiser on the Cactus Ridge swap, did not immediately return phone calls Friday, but as scrutiny has focused on airport land deals, she has said that much of the criticism of the airport and appraisers has come as a result of exploding land value, not necessarily bad appraisals.

Tio DiFederico, an appraiser in the Lowe's office of Integra Realty Resources, said skyrocketing market values mean appraisals rapidly become obsolete.

"I wish I could buy everything in Las Vegas for what it sold for two years ago," he said. "This valley has just skyrocketed in the last 18 months."

A deal for land under the old Algiers Hotel included a sale for $26.2 million a year ago. It recently sold again as part of a package to developers of Turnberry Place for $98 million, DiFederico said.

Appraisers only have the ability to judge where a piece of land is at a particular time and can't predict market changes, he said.

"We can't negotiate market value because that's set by the market."

Sanchez said criticism of the airport land swaps has failed to take into account the land acquired by the county.

"The bottom line is with any trade that affects the airport, the airport also receives land, and our land is just as valuable or more so now," she said. "Values may go up for the land we traded, but our values went up at the same time."

Bulloch agreed.

"We've been in a hyper real estate market," he said. "Even more so, there has been a South Strip phenomenon going on."

Intense development by a number of local and national investment groups has pushed up land value rapidly, Bulloch said. "It is surprising how much activity there is. Look at all the projects going on."

He noted that the county acquired 19 acres at the intersection of Las Vegas Boulevard and the Las Vegas Beltway as part of the swap, and he argued that the potential value of that land also is increasing for the county.

"Just remember the property we traded to the county is also on the Las Vegas Strip and they (the county) will also be the benefactors of the hyper market and South Strip phenomenon."

FitzSimmons protested the swap because the deal would have made development of neighborhood property from a client more difficult. FitzSimmons and her client, university Regent Steve Sisolak, are suing the county over height restrictions they argue have hurt the value of their property.

Though as old leases have expired the management of Cactus Ridge has switched the residents to month-to-month rentals, some of the existing leases extend to 2009. FitzSimmons, however, said she believes the residents of Cactus Ridge will have to move out to make room for new development well before all the old leases expire.

"Nobody's paying $32 million to keep it a mobile home park," she said.

Bulloch said, however, that the leases that he inherited from the county carry over to the new owners.

"We honored the leases 100 percent," he said. "We insisted that the buyers purchase it with the assumption of all of the leases intact. It's now their (Las Vegas Mobile 18) park, and it's now their obligation to honor those leases."