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Tuesday, January 26, 1999
Copyright © Las Vegas Review-Journal
LV sells golf club acreage to Walters
City Council members see $894,000 that they can use for soccer and baseball fields and make the deal.
By Mike Zapler
Review-Journal
Eager to collect money for parks and reassured by three appraisers, the Las Vegas City Council sold for $894,000 160 acres on which sits a world-class golf course.
The 4-1 vote Monday gave golf course developer Billy Walters control of property he had leased from the city. A 50-year contract Walters signed with the city in 1997 had required him to set aside 50 percent of tee times at his Royal Links for local players and to limit their green fees to the same price as his Desert Pines course, which costs $53 for 18 holes.
Monday's vote released Walters from those obligations. If the council had not sold the land, the city would have inherited the golf course in 50 years while collecting annual lease payments of $100,000 most years until then. Walters said last month he spent $35 million on the course; last week he said he was misunderstood and that the cost was about $17 million.
Councilman Arnie Adamsen voted against the sale, which was approved with minimal public opposition.
"I have some concerns with this," Adamsen said, saying he was inclined to "take the long-range view and serve those who wish to have some affordable golf."
But other council members said they were comfortable with the sale. Three appraisers signed off on the purchase price of $894,000, money that officials said will be spent on parks in northwest Las Vegas.
"We're using money today to build soccer fields and ball fields, which has been the concern of this council," Mayor Jan Jones said.
The price was calculated by estimating how much the course, the land on which it sits and the lease would be worth in 50 years. That number was then converted into a "net present value" -- the value of the figure in today's dollars.
The 160 acres was valued by three appraisers at $560,000 or $3,500 per acre.
Clark County Assessor Mark Schofield said his agency's most recent appraisal of the land was $40,000 per acre. But Schofield said his office is re-evaluating golf course land, and he expects the Royal Links land to be reappraised at about $20,000 per acre.
"We're finding that in the case of golf course land, the lion's share of the value resides in the improvements," he said.
Walters said several factors accounted for the $560,000 appraisal. For one, the course sits adjacent to the city's waste water treatment facility. Also, the land deed restricts uses of the property to a golf course or open space, meaning it cannot be developed with homes or commercial businesses.
"All I can do with this property is operate a golf course. Nothing more, nothing less," Walters said.
Walters' city lease had required annual payments of at least $100,000 from the seventh through the 50th years, with smaller payments from years two through seven.
One real estate broker who has worked in Las Vegas said in an interview that the city appears to have accepted a bad deal, even with the limits on how the land can be used. He said land near the golf course -- but close to either the city's or Clark County's waste water treatment plants -- has sold for much more.
"What the city has done is taken an asset and accepted a paltry $900,000 for it," said Jack Holler, who owns a commercial real estate company and belongs to Walters' Stallion Mountain Golf Course, which is adjacent to Royal Links. "And by doing so, they've given Mr. Walters free rein to never open up his course to people who can't afford his $195 green fee."
Walters said nonresidents will be charged a $195 green fee during the week and $225 on weekends. Southern Nevada players will be charged a lower but yet undetermined rate, he said.
He said there is no shortage of golf for Southern Nevada residents. At his Desert Pines course, 80 percent of tee times are reserved for locals, yet only 23 percent of those slots are being used.
"Anyone who has represented to you that there is not enough golf in Clark County, they are wrong," Walters said.
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Graphic by Mike Johnson.
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