Henderson parcel returns to auction

Just three years ago, a partnership of American Nevada Co. and Del Webb Corp. paid $47.2 million -- $7.2 million above the so-called fair market value -- for a 1,940-acre parcel in North Las Vegas auctioned by the Bureau of Land Management, and tipped off 2 1/2 years of skyrocketing bids on undeveloped land. By November 2003, the BLM had set a $250 million price tag for a comparably sized tract in Henderson, but bidders ultimately balked.

Two developments since that last auction may work in the BLM's favor next Wednesday when it once again tries to auction off its most expensive parcel to date, according to Dennis Smith of Home Builders Research Inc.

Henderson city officials previously insisted any buyer enter a development agreement that requires a "workforce housing" stipulation that sets aside a certain percentage of the land for less-expensive housing -- presumably less than $250,000 per home. The city has waived the requirement for the first phase of any potential community, according to Henderson real property specialist Bob Wilson.

Smith said dropping the requirement, or reducing it significantly, may be enough to entice a skeptical bidder turned off by the price.

"It depends on Henderson, what the final zoning requirements are," Smith said.

The BLM has not budged on its "fair market value" opening bid, leaving market conditions and civic authorities as the only wild cards.

Smith pointed out the pool of potential bidders is already small, given the number of companies able to produce the needed cash.

Another recent development is the hyperappreciation of homes since the beginning of the year. More expensive homes means more a developer can charge for a new one, which changes their calculations of how much they are willing to pay for land.

Higher home prices may make the record quarter-billion-dollar price seem not so steep, something Smith said no one could foretell six months ago at the last auction.

"Who in their right mind thought prices were going to do what they did over the last four months? No one. No one. If anyone says they did they're a liar," Smith said.

Releasing the parcel may have no immediate impact on home prices, but would sustain the valley's rapid growth. With few privately held large parcels left to purchase, developers have turned to BLM auctions to acquire the thousands of acres needed every year to maintain growth.

Only one other major parcel is for sale, a 355-acre piece near the Southern Highlands Golf Club in the southwestern valley. At $22 million, its per-acre price is slightly less than $62,000, roughly half that of the marquee parcel.

Otherwise, the latest offering is little different from previous ones: a total of 71 parcels measuring 2,532 acres at a combined appraised value of more than $309 million.

The rest of the parcels range from 1 1/4 to 10 acres and are situated throughout the valley, including many in established areas. The cheapest, measuring 3 3/4 acres in the southeast portion of the valley, is priced at only $35,000, but comes with some restrictions, including a road, power transmission lines and a well-monitoring station. Less encumbered land is also available.

Six sales at the last auction were canceled when the winning bidder failed to produce the required 20 percent down payment and are back up for bid.

Registration for the auction begins at 8 a.m. at Sam's Town Hotel and Casino. Parcels go on the block at 10 a.m.

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