Tuesday, November 18, 2003
Copyright © Las Vegas Review-Journal

COMMISSIONERS' MEETING: County weighs land swap

Property exchange near McCarran under scrutiny

Click above for enlarged image. Illustration by PAT KILLINSWORTH / REVIEW-JOURNAL

One critic claims a controversial land exchange between McCarran International Airport and a Las Vegas real estate broker is an "inside deal" to rescue a businessman from financial straits.

But broker Howard Bulloch says there is no insider deal and that he has been trying to purchase the airport land for years.

Clark County commissioners are expected this morning to decide whether to allow the land deal, which will face scrutiny from several commissioners who have questions about the proposal.

The airport proposes that it give Bulloch about 64 acres, including land near the airport and a mobile home park off Serene Avenue about a block from the Strip, in exchange for Bulloch's 19 acres along Las Vegas Boulevard just south of Warm Springs Road.

One piece of land Bulloch would acquire from the airport, an office complex on Reno Avenue, is next to Bulloch's property across from Mandalay Bay where he plans to build a London-themed resort called World Port.

"This land exchange, like so many before it, stinks of favoritism by the airport to selected insiders," said attorney Laura FitzSimmons, who represents the owner of some property adjacent to Bulloch's land. "This time, the insider is Howard Bulloch."

Bulloch, whose World Port project is in a "holding pattern," said he has tried to buy the Reno Avenue property from the airport for four years.

"If this was an inside deal, it would have been done a long time ago," Bulloch said. "It's so far from an inside deal, I'm offended by (FitzSimmons') comments."

Two airport-hired appraisers each valued the airport assemblage at $16.8 million and Bulloch's land, which according to court documents is emerging from Chapter 11 bankruptcy, at $16.5 million. Bulloch is expected to pay the difference in cash.

Clark County Aviation Director Randy Walker said Monday that he wants Bulloch's land because of its proximity to McCarran's busiest runway. Owning the land allows the airport to ensure that development on the property is compatible with the airport, which means no houses, apartments, hotels or motels.

"Every piece of land we can touch that is sensitive to our flights makes our jobs easier in the long run," Walker said. "There is no secret as to why we're doing it; there is no hidden agenda."

FitzSimmons, along with some county commissioners, questioned why the airport is interested in buying Bulloch's land but not adjacent land that fronts Las Vegas Boulevard.

University Regent Steve Sisolak, who owns 10 acres between Las Vegas Boulevard and Bulloch's property, said the airport expressed no interest in purchasing his property. Sisolak successfully sued the airport after it failed to compensate him for the losses he incurred on his land when height restrictions were imposed. A jury awarded him $6.5 million in March; the airport filed an appeal.

Bulloch's land has been on the market since 1997. According to his deposition taken during the Sisolak trial, several businesses, ranging from office park developers to Station Casinos, showed interest in the land but no deals materialized.

FitzSimmons says that, like Sisolak, Bulloch has struggled to sell his land because of airport-imposed height restrictions on property below McCarran's takeoff and landing routes. The ordinance forbids developers from building structures that exceed 70 feet tall, fearing that tall buildings could interfere with airliners.

FitzSimmons contends that the airport is rescuing Bulloch from a losing venture because of his ties to airport officials. When Bulloch assembled the 77-acre World Port site, he brought the late Bob Broadbent on as a land consultant. Broadbent was Walker's predecessor as the county's aviation director.

"The airport is bailing (Bulloch) out of a bad investment by acquiring this property," said FitzSimmons, who represents Sisolak.

Bulloch denies he has ties to airport officials or that his property is in trouble financially.

After the proposed land exchange was announced in October, it was advertised in the newspaper, giving competitors an opportunity to submit a counteroffer.

"The airport went to extreme lengths, and Mr. Sisolak did not submit a competing bid," Bulloch said.

FitzSimmons said Sisolak saw the ads, but decided not to make a bid. She declined to explain why.

FitzSimmons also questioned a fluctuation in values on the airport land and Bulloch's land during a five-month period, suggesting the numbers were adjusted to make it appear to be a fair deal.

One of the airport's appraisers looked at Bulloch's undeveloped parcel twice, once in April and again in September. In the first appraisal, Bulloch's property was valued at $13.4 million. Five months later, the appraised value was $16.5 million, a $3 million increase.

Conversely, the airport land was first appraised about $19 million and later was reduced to $16 million.

Walker said the airport prefers to swap land of equal value so that massive amounts of cash do not have to change hands.

Bulloch said the land appraisals were fair.

The value of the airport property under the office complex is based on income from leases, he said. The projected income from the lease agreements wasn't as healthy as it was expected to be when the first appraisals were conducted.

At the same time, new time-shares and hotels were built along Las Vegas Boulevard South, increasing the value of Bulloch's property, he said.

County Commissioner Yvonne Atkinson Gates questioned the land exchange process in October. On Monday, she said she still has concerns, even after meeting with airport officials about today's deal.

"If a person wants land, they should just buy it straight-out; hold an auction and go for the highest price," she said. "The money you make off that land, if there is land you want, you go buy it."