BLM taking bids on 600 acres
Homebuilders ‘frantic for land,’ eager for agency’s largest sell-off of parcel allotments since 2005
The local economy is growing, and builders need land.
They’ll have their chance to snap up some bargains at a Bureau of Land Management auction today, when the agency will take bids on nearly 600 acres of land across the Las Vegas Valley.
Land ends up on the bureau’s auction block after potential buyers ask municipalities to nominate properties for sale. In that sense, demand mirrors economic growth. Poor growth — as the market saw during the recession — means little appe- tite for fresh parcels.
“It demonstrates that the economy is in a better position than it was before these land releases started to unfold,” said Brian Gordon, a principal in local research firm Applied Analysis. “Assuming there’s demand at this upcoming auction, developers are more bullish on the local econ- omy.”
The bureau brought back its oral auctions after a nine-year hiatus in January 2014, when it put 440 acres on the block. Builders and investors bought 160 of
Valley’s land prices rose about 30 percent in 2014
those acres for nearly $24 million. Another 516 acres went up for sale in December. The bureau actually sold 415 acres for $49.7 million.
On Tuesday, 598 acres will be available for a minimum of $29.7 million. It’s the largest multiple-parcel auction since November 2005, when the agency sold nearly 3,000 acres.
At least one local builder said he’ll be there with checkbook in hand.
American West Development founder Larry Canarelli said he’s eyeing parcels in the south and southwest that will complement existing holdings. Canarelli, whose company has been the biggest buyer in recent auctions, didn’t nominate any land for this sale. Rather, he’s saving his preferred parcels for another auction later this year. There are no “signature” parcels in this sale, he said.
Still, the values the Bureau of Land Man- agement has set are “fairly low,” Canarelli said. So it makes sense to buy, even if it’s just to invest rather than to build. About 25 percent of the land American West bought last year was for investment.
“We’ll buy land that we might not have bought before. We’re not necessarily going to build on it. That doesn’t rule out building on it as the market tightens up,” he said.
Builders are “frantic for land” as sales have surged in 2015, Canarelli said, so expect some of the city’s other big homebuilders to bid as well.
As in past auctions, most of the 29 parcels are scattered across the valley in smaller pieces of one to 15 acres. But three mid-sized parcels ranging from 35 acres to 60 acres near Warm Springs and Racetrack roads will be on the market for $1.75 million to $3.3 million each. The properties are zoned to have two homes per acre — a potentially tough sell in a submarket that may not be able to support the higher prices of low-density neighborhoods, Canarelli said.
Developers and investors who’ve tracked the oral auctions since their January 2014 revival will also recognize at least one plot. The agency has put back on the auction block a 247.6-acre tract at the southeast corner of Hollywood Boulevard and Cheyenne Avenue.
The parcel first went on the market 15 months ago. Builders salivated over its size, given challenges finding big chunks of land for large-scale development. But the property went unsold. The land is problematic because a third party owns its mineral rights, and the buyer would have to try postsale to negotiate those rights.
The acreage also has a gravel pit, and its location near Nellis Air Force Base could mean noise-mitigation issues.
The latest sales roster says the plot still “overlies privately owned sand and gravel deposits,” and that its northern portion is within the Air Force base’s live-ordnance loading area.
The price has come down this time, though: The bureau set a market value and starting bidding price of $1.85 million, down 28.5 percent from $2.59 million in 2014. Local land prices in general rose about 30 percent in 2014, to about $300,000 an acre, Gordon said.
Proceeds from the bureau’s land auction go to Nevada’s education fund, the Southern Nevada Water Authority, public parks and the purchase of environmentally sensitive land. Past auctions have funded the $25 million renovation of Lorenzi Park, as well as the visitors’ center at Red Rock Canyon National Conservation Area, outdoor features at the Las Vegas Springs Preserve and amenities at Lake Mead.
The auction begins at 10 a.m. inside the Council Chambers at North Las Vegas City Hall, 2250 Las Vegas Blvd. North. Contact Jennifer Robison at email@example.com. Follon her on Tnitter @J_Robison1