BLM’s latest land auction brings in $602.49 million

Jennifer Shubinski

Thursday, Feb. 3, 2005 | 10:58 a.m.

The developer who bought the largest land parcel at Wednesday's federal land auction said he is disappointed in President Bush's plan to funnel that money, which is now designated for Nevada, to the federal treasury to ease the nation's soaring deficit.

John Ritter, chief executive of Focus Property Group, has spent more than $1.3 billion in federal land auctions -- including $510 million Wednesday for 1,710 acres -- since November 2002.

"This proposal to put the money against the deficit is frankly just disgusting in my mind," Ritter said after the auction. "I'm completely against it. There are so many needs in Southern Nevada."

Ritter, who in the past has garnered national attention because of his big land purchases, said he would make it known that he is against the administration's plans.

"There are still major issues with our school systems, road infrastructure, huge issues for traffic, and quality of life that this money would be better spent to address, even the (housing) affordablilty issue," he said. "To use the money to offset poor money management on the administration's part and to pay for the war is unfair."

Ritter, along with a group of eight homebuilders, successfully outbid a consortium that included Garry Goett, president of Olympia Land Corp., the American Nevada Company, DR Horton and American West.

The auction included the 1,710-acre piece, referred to as the Kyle Canyon Gateway parcel, and another 573.84 acres in Clark County broken up into parcels ranging from 1.25 acres to 42.5 acres. Three parcels totaling 359 acres in Lander and Elko counties also were sold.

Wednesday's auction of 60 parcels generated $602.49 million, or about $263,706 an acre. The Kyle Canyon parcel sold for $187 million more than the appraised value.

Last summer's auction of 71 parcels totaling 2,532 acres of land sold for $707.2 million, or almost $279,300 an acre.

The land sales are made possible under the Southern Nevada Land Management Act passed by Congress in 1998. The revenue generated from land sales goes to state programs, with 5 percent going to the state of Nevada General Education Fund, and 10 percent to the Southern Nevada Water Authority. The remaining 85 percent is used to acquire environmentally sensitive land in Nevada, develop a multi-species habitat plan, develop parks and trails and to use for other conservation projects.

Bush's proposed budget, set for release next week, recommends that Congress change the law this year so that the funds from the BLM's land sales would instead be funneled to the federal treasury.

Including this week's land auction, almost $2 billion -- more than half paid out by Ritter and his partners -- has been generated under the land act and 10,427 acres have been sold.

Since the administration's plans were made public Wednesday, Nevada lawmakers vowed to kill any measure that would divert the money from the sales away from the state.

"We've done some remarkable things throughout this state with the proceeds from these land sales, and it is absolutely critical that the funds continue to stay right here in Nevada," Sen. John Ensign, R-Nev., said after the auction. "I will fight tooth and nail to make sure the intent and integrity of this legislation is honored."

Ritter said if the administration's plan goes through it could make him "less interested in spending money in the future."

He said he's always felt "OK" about spending millions of dollars because he knew the money was staying in Nevada.

Ensign said he understands the land auctions have helped nurture a pride in Nevada.

"Through the land auctions, residents can feel good knowing that they are putting essential funds into quality-of-life improvements right here," he said. "They are growing our communities but also helping to pay for environmental and educational programs."

Ritter, along with homebuilders KB Home, Kimball Hill Homes, Lennar/U.S. Home, Meritage Homes, Pulte Homes/Del Webb, Toll Brothers, Woodside Homes and Ryland Homes, expect to build a master-planned "smart city" community on the 1,710 acres.

The city of Las Vegas has developed a master-plan proposal that would use little water, create power using alternative energy sources, and place homes, schools, parks and employment centers within walking distance of each other.

Infrastructure construction is expected to begin in the next 12 months and the first home sales are slated to start in the first quarter of 2008, Ritter said.

"We were involved in those discussions and embrace it 110 percent," he said.

The Kyle Canyon master plan will be directly adjacent to Focus' 1,200-acre Providence master-planned community, which is under development at the Las Vegas Beltway and Hualapai Way.

Focus, along with another builder group, was the successful bidder at the June auction for 1,940 acres in Henderson. The company also has under development the 3,000-acre Mountain's Edge in the southwest valley.

Like last summer's auction, Wednesday's sale generated prices significantly above the appraised value.

The resulting high land prices only work to push home prices up, Goett said after the auction.

When the bidding for the 1,710-acre parcel reached $510 million, Goett refused to budge -- even another $1 million.

"We work hard to determine what the property is worth and then we stop" when it reaches that number, Goett said.

Goett said the only way for home and land prices to ever go down is to get more land released through the auction process.

"We are not even meeting the current demand for land," he said.

Goett estimated that the BLM, in conjunction with local municipalities, needs to release at least 10,000 acres a year through federal land auctions.

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