BLM tak­ing bids on 600 acres

Home­builders ‘fran­tic for land,’ ea­ger for agency’s largest sell-off of par­cel al­lot­ments since 2005

Las Vegas Review-Journal - - BUSINESS - By JEN­NIFER RO­BI­SON LAS VE­GAS RE­VIEW-JOUR­NAL

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 jro­bi­son@remien­jour­nal.com. Fol­lon her on Tnit­ter @J_Ro­bi­son1

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