Water Authority stymies Henderson’s land plans

Thursday, Feb. 2, 2006 | 11:24 a.m.

Concerned about losing millions of dollars in revenue, the Southern Nevada Water Authority has stymied Henderson's bid in Congress to acquire 500 acres from the federal government that the city hopes to sell for use as a business center employing thousands of people.

Legislation for the proposed acquisition - introduced last year by Senate Minority Leader Harry Reid, D-Nev., and Rep. Jim Gibbons, R-Nev., and backed by the rest of the Nevada delegation - had been expected to win easy approval.

But the measure was sidetracked recently when the Water Authority objected to language changing the formula for disbursing proceeds of the city's planned land sale.

Under a 1988 law authorizing federal land auctions, 85 percent of the proceeds go for parks and conservation projects, 5 percent to the state for schools and 10 percent to the Water Authority for water treatment projects.

Henderson's bill, though, would have given the city the 10 percent normally received by the Water Authority - an amount estimated at $5 million by Henderson officials.

That estimate, however, may be low - very low. Based on real estate experts' estimates that the land could be valued at $218 million to $419 million, depending on the extent to which infrastructure is in place, the city's 10 percent could be worth $21 million to $41 million.

The city intended to use the funds to build water and sewer lines and other infrastructure, as well as for planning and zoning that would add value to the land, said John Rinaldi, Henderson's manager of property and redevelopment.

"We are working on a compromise - some sort of solution that hopefully will enable the bill to proceed this spring," Rinaldi said. "I think it will eventually be resolved."

Melissa Subbotin, a Gibbons spokeswoman, said the bill will remain on hold while Henderson and the Water Authority try to settle the issue.

"We are waiting until they come to an agreement," Subbotin said. "We are taking our cues from them."

Richard Wimmer, the Water Authority's deputy general manager, stressed that the agency did not object to the project - only to Henderson's attempt to get the agency's share of the money.

"We support it if they drop the 10 percent," Wimmer said.

Henderson Councilwoman Amanda Cyphers, the Water Authority's chairwoman, said she expects the city will back away from seeking the 10 percent in exchange for the authority's support. Henderson, because of high land prices, was looking for creative ways to provide incentives to developers to speed up the project, she said.

The Water Authority, which manages the region's water resources, needs the revenue for its projects and does not want the proposed formula change to be a common practice, Cyphers said.

"It was tough for me because I understand both sides," she said. "The Water Authority needed to protect the 10 percent. (It) didn't want to set a precedent that could be utilized anywhere else."

Even without the money, the project will be successful, Cyphers said. One option will be for the city to establish special improvement districts in which property owners pay for needed infrastructure, she said.

If approved by Congress, the land would be transferred directly to Henderson, circumvent- ing the normal auction through the Bureau of Land Management.

The legislation initially called for the transfer of 547 acres, but that was cut to 502 acres to address the Henderson Executive Airport's concerns about compatibility of development. Forty-five acres on the airport's southwestern edge will go to Clark County for the airport's use, Rinaldi said.

A 502-acre complex, which is expected to include a range of businesses such as light manufacturing, research and development facilities and corporate and regional headquarters, could contain 6 million square feet and employ about 17,000, according to John Restrepo, a principal at the research firm Restrepo Consulting Group.

City officials hope the site will be attractive to developers and businesses alike, given the lack of industrial property in the region and its proximity to McCarran International Airport and the Henderson airport.

Assuming the legislation is approved, city officials said it would take at least a year to prepare plans for the property before auctioning it.

Brian Wargo can be reached at 259-4011 or at wargo@lasvegassun.com.