Del Webb, PermaBilt/ALC
Cost of Federal Land in Vegas Valley
Goes Up to Land-Swap Operators

by Steve Miller
copyright (c) 1997, Electric Nevada

Bureau of Land Management officials in Nevada, after criticism and controversy, have decided to start over again virtually from scratch on the Del Webb and PermaBilt/American Land Conservancy land exchanges.
And in both cases, the private parties seeking the exchanges now have to offer additional private lands for the Las Vegas-area federal real estate they were earlier to get for less.
Perhaps coincidentally, say sources, auditors from the U.S. Interior Department's Inspector General's Office are back in Nevada again, once more scrutinizing BLM land swaps.
A year-long audit investigation of bureau land acquisition practices in Nevada, beginning in early 1995, produced Inspector General criticisms last year that the BLM in Nevada had shortchanged taxpayers at least $12 million in four land swaps studied.
According to the Nevada BLM's former chief appraiser, Charles E. Hancock, of Reno, whose detailed 1994 letter to the I.G. triggered the probe, the heart of the problem is a system of incentives that essentially reward BLM officials for knowingly endorsing grossly inadequate land appraisals at both ends of the state and on both ends of the land exchange process.
These skewed appraisals, says Hancock, greatly raise the price when the government is buying, then greatly reduce the price when the government is selling. Pocketing the difference between those prices



and the actual market value of the properties, he points out, are favored real estate operators. Losing out, he says, are the taxpayers and the public.
In a February 20 letter to Hancock, Michael F. Dwyer, manager of the BLM's Las Vegas District office, indicated the agency was essentially throwing out its November 4, 1996 decision to go ahead with the Del Webb exchange under terms the agency had accepted at that time.
"We will not be implementing the decision signed on November 4, 1996," wrote Dwyer.
The BLM manager also announced that the key appraisal upon which that earlier decision had rested is also being thrown out.
"BLM will complete a second appraisal for the federal lands Del Webb is proposing to acquire," he said.
What value the federal agency was placing on the prime Las Vegas-area real estate sought by Del Webb has still never been disclosed by BLM officials. The
secrecy on that point had, early this year, become a major source of suspicion


 
in some quarters that the agency -- under explicit
pressure from U.S. Senator Harry Reid to smooth the way for Del Webb, a major Reid campaign contributor -- was cutting another 'sweetheart' deal that would short-change taxpayers.
In a second letter, dated February 25, Dwyer indicated that an October BLM decision that would have swapped other valuable Las Vegas Valley land to the PermaBilt Homes / American Land Conservancy combine, was also being discarded.
"Please be informed we will not be implementing the decision signed on October 28, 1996," he wrote.
The two letters to Hancock showed evidence of careful in-agency coordination. Both began, "Based on public comments we




have received and other factors, we will be modifying our process for moving forward with [this] exchange."
The letters also said, "Additional private lands have been offered by [these proponents] for inclusion in Phase I of the exchange. We will complete a feasibility analysis on these new offered lands and will include them in an amended Notice of Exchange Proposal and the Environmental Assessment (EA) if they appear suitable for Federal acquisition."


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