BLM AUCTION: Federal land sales draw strong bidding

With the bears in control of Wall Street, the bulls appear to have found a refuge in the Southern Nevada real estate market.

Flight from the stock market and a tightening supply of land available for sale in the Las Vegas Valley were among the reasons cited for Tuesday's surprisingly robust turnout at the Clark County Commission Chambers for the most recent Bureau of Land Management auction, which produced bids on all 39 parcels offered and netted $30,929,000 on 36 sales.

Most of the parcels, in fact, received multiple bids and many sold well above their appraised fair market value. Three of the sales, however, were later canceled when the winning bidders failed to produce the required 20 percent down payment by the end of the day.

The parcels sold are situated in three regions of the valley -- the northwest, south and southwest -- all growing areas. Buyers represented private parties and large companies, including a few large home builders.

The standing-room-only audience came as a pleasant surprise to Michael Dwyer, the project manager for the BLM's Southern Nevada Public Lands Management Act, which provides for the sale of federally held land in the Las Vegas Valley. For attendance, the event was the largest to date, topping even the highly anticipated sale of a 1,905-acre North Las Vegas parcel in May 2001.

Dwyer was uncertain why bidding was so strong, but suggested timing was key.

"You hear a lot of the financial advisors are telling people to get out of stocks and buy real estate, so maybe here is where they came," Dwyer said. "It was probably some combination of people going with real estate as an investment and the recognition of a shortage of land. There's been a lot of publicity lately about how we're running out of land in this valley."

The auction was in many ways the most successful to date, according to Dwyer, citing several key statistics:

-- Every parcel available drew bidders. In eight previous auctions including three conducted on-line since November 1999, the BLM never has received bids on every parcel offered in a given auction;

-- All but four parcels were bid up from their starting prices, which were determined based on appraised fair market value. On average, parcels were bid up 41 percent more than their starting price. In previous auctions, 47 percent of parcels sold for the minimum allowable bid;

-- The average price skyrocketed. Excepting the 1,905-acre parcel sold in North Las Vegas, the parcels in all previous auctions averaged $116,004 per acre. The average per-acre price at Tuesday's auction was $150,733, a 30 percent increase. "Maybe it just reflects the demand," Dwyer said;

-- Eleven parcels that had failed to draw bids at previous auctions, some for more than two years, were among the acreage sold.

Dwyer said the results were encouraging for future land sales by the BLM. The next one is set for November.

The auction originally was scheduled for May 14, but was postponed after a local activist sought an injunction in federal court to block the BLM land sales, citing environmental impact. A temporary injunction was rejected. A permanent ruling is pending.

Dwyer said the BLM has complied with environmental requirements, but voluntarily postponed the auction until after the temporary ruling to ensure its buyers the sales would be completed.

Previous auctions have generated revenue of more than $124 million, 85 percent of which is allocated for the purchase of environmentally sensitive land and the development of public recreation facilities in Nevada, primarily within Clark County. The balance of the funds is allocated to the Southern Nevada Water Authority (10 percent) and Nevada's public schools (5 percent).

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