Of Nevada’s 70.2 million acres, 83 percent is federally managed and owned. The entity charged with administering Nevada’s vast tract of real estate is the Bureau of Land Management (BLM), part of the U.S. Department of the Interior. The BLM oversees 68 percent of federal land, which means almost 48 million acres are under BLM control in Nevada. The stated purpose of the BLM is to manage and convey federal land to the public in a manner that ensures a fair return to the taxpayer and supports the achievement of healthy, well-planned communities.
The BLM faces two challenges regarding its disposition of federally-owned land within the state’s borders. In Southern Nevada, which has been averaging 5,000 new residents per month for the last 10 years, how can the BLM help the area absorb the population growth and satisfy the resulting high demands for housing and land development? In Northern Nevada, with a majority of its population clustered in Washoe County, there is a clamor for conservation, preservation and set-asides.
The procedure for dispensing land to the public formerly went through the BLM’s Land Swap Program, controlled by federal officials in Washington, D.C. Net proceeds from land swaps were not necessarily allocated to Nevada. A 1996 federal audit of the BLM land swap program and simultaneous public uproar about land values led to the establishment of the Southern Nevada Public Land Management Act (SNPLMA), passed in October 1998. A new Joint Selection Process was developed after a serious challenge was posted against the BLM’s practice of swapping land. Companies were allowed to return land to the federal government that the government had previously owned, and exchange it for more desirable commercial real estate. The appraised value of the purchased land and the actual purchase price were both lower than they should have been, in the opinion of a number of outspoken individuals.
Mike Dwyer, currently BLM’s Las Vegas project manager, was BLM field manager from 1995 to 2000 when land exchanges were the unpopular norm. He said, “We got hammered in the papers several times over different issues with those exchanges. They were controversial – some of the controversy was reality and some was perception. If I had to boil it down to a couple of key issues, the first was the perceived under-valuing of the federal land being traded, and second, we were criticized for these land swaps because it appeared they weren’t really open to the public.”
Thanks to the SNPLMA, revenue derived from land sales will now remain in Nevada. A portion of the revenue goes to the Southern Nevada Water Authority (10 percent) and the State General Education Fund (5 percent). The remaining 85 percent goes into the “Special Account,” which allows the BLM to buy and sell parcels and conduct business.
“The SNPLMA allows the BLM to sell land and benefit us locally; money doesn’t go to Washington D.C. It also helps people in this state and protects riparian areas, critical fish areas and habitats,” said Phillip Guerrero, of the BLM Las Vegas public affairs office. The SNLMPA directs the BLM to privatize land within a specific boundary around the Las Vegas Valley to make real estate available for community growth, reports Robert Abbey, BLM Nevada state director, in the May 2001 SNPLMA Implementation Status Report.
Las Vegas is landlocked by federal holdings, so the opportunity for more growth in Southern Nevada is dependant upon the privatization of these lands. Clark County currently has 4.6 million acres under federal management. The public can participate in the BLM’s land sales and conveyance program by making a written request that a particular parcel be released for sale at an auction. The BLM is then required to assess the request and act on it, either positively or negatively, within a year.
The first BLM-run land sales and conveyance auction in November 1999 yielded an appraised value of $90,271 per acre. The sale of 2,410 acres in five separate auctions yielded a total of $106,412,500, for an average of $44,154 per acre. A sixth auction is scheduled for November 2001. A May 2001 land auction gaveled off 1,905 acres of BLM land within North Las Vegas city limits to a partnership composed of the Del Webb Corporation and American Nevada Corporation. It brought in $47.2 million in spirited bidding, exceeding the appraised value of $40 million. This was only the first phase in the BLM’s plan to dispose of the federally-controlled parcel, which contains a total of 7,500 acres. Builders plan on developing it into a master-planned community of 15,000 people. The BLM and builders are taking a “wait and see” approach before more action is taken on another land auction for the remaining acres.
Although the BLM has switched to using auctions as the principal way of disposing of property, some exchanges are still done. Kristi Owens, a real estate broker at Countrywide Commercial Investments, recently handled a land swap, exchanging 42.5 acres at Sunset and Decatur controlled by the Department of Aviation for a piece of privately-owned land nearby. The parcel was eventually released for use as a headquarters facility for Yellow Checker Star Cab Company. “There are still some land swap opportunities,” said Owens. “The exchange process is extremely cumbersome, but sometimes, as in this case, it can work out well for both parties. The BLM’s policy of releasing land for auction is a wise tactic. Auctions are one of the most exciting things in real estate. I attended the BLM auction in May. It was standing room only and was an exciting spectacle.” BLM’s Dwyer agrees. “It is fun to go to these auctions,” he said. “Some parcels don’t sell well at all; other properties sell for significantly above fair market value.”
Developers and real estate brokers are urging the BLM to make more land available in Southern Nevada. “Turn it over,” said Richard Lee, director of public relations of First American Title Company of Nevada, the author and creator the Las Vegas Development Update. “For the most part everyone is cooperating, because they realize the necessity of getting more BLM land into private hands,” he said. “We have enough demand for homebuilders to use another 2,000 acres and be sold out on a wholesale level in a year. We’re absorbing a lot of land for single homes and residential homes, about 4,000 acres per year. We’re selling 20,000 to 22,000 new homes per year at 3-1/2 to 5 houses per acre,” he added.
Just 80 miles north of Las Vegas in Mesquite, 15,000 people live in one of the fastest-growing communities in the region. The BLM is in the process of setting aside 6,500 acres for a new Mesquite airport, and other parcels are being allocated for local control and local purchase only.
Northern Nevada doesn’t want to go the same way as fast-developing Southern Nevada. John Singlaub, BLM field manager, Carson City District, said, “There is no private land shortage here. We’ve completed a number of public land acquisitions to guarantee available land if needed. We are acquiring it to hold for long-term recreation uses and save scenic views. We don’t see the pressure to develop public lands for some 40 to50 years. The [Washoe] County Commission passed a bond issue a year ago to create recreational opportunities. In Reno/Sparks we reduced available land from 16,000 acres to 1,600 acres for development.”