Sunday, July 03, 2005
Copyright © Las Vegas Review-Journal

DEVELOPER BILL WALTERS: Lucrative deals just par for course

Council set to lift deed restrictions on 160 acres bought from city

Bill Walters Developer says he has been fortunate in dealings with local governments

Should he win permission to convert the lush Royal Links Golf Club into a residential neighborhood, it wouldn't be the first time golf course developer Bill Walters profited from the actions of local governments.

In 2002, Walters entered a lease agreement with the county to build two golf courses and a park on more than 300 acres of county land on Durango Drive. Commissioners later agreed to rezone 60 acres to a more lucrative commercial use on the property Walters acquired at no cost.

And last year, the Henderson City Council swapped vacant property zoned residential in exchange for Walters' failing Wildhorse Golf Club on Warm Springs Road.

Walters' critics have questioned whether political ties have allowed him to secure the lucrative deals.

"You can't argue he's not a smart businessman; but on every deal a developer would say, 'Man, I wish I could get that deal.' Billy Walters gets those deals," said Lisa Mayo-DeRiso, a business development consultant who has been critical of local governments' dealings with Walters. "Is it that you are just so lucky that you happen to be there?"

Defenders of Walters credit the golf course magnate with being a savvy businessman.

Walters said he has been fortunate when it comes to deals he has secured with local governments.

"When it comes to land transactions, we've been darn lucky," Walters said.

On Wednesday, the Las Vegas City Council will decide whether to lift deed restrictions on 160 acres at Sloan Lane and Vegas Valley Drive that Walters leased from the city in 1997.

Under that deal, Walters was expected to build the Royal Links golf course and pay the city $100,000 a year for the duration of the 50-year lease.

In 1999, just as Royal Links was set to open, Walters purchased the property for $894,000, or about $5,600 an acre.

At the time, the property's deed restrictions prohibited homes on the land because of a nearby wastewater treatment facility.

"Originally that land was designed to be a buffer for the plant because of odor control issues," said Mark Vincent, director of finance and business services for the city of Las Vegas.

"Technology is such that odors aren't anything like they used to be; (the golf course) is no longer necessary for a buffer for odor," Vincent said.

With odor no longer a problem, Walters announced last month he plans to build homes on the golf course land.

Walters said he must pay about $7 million -- the residential value of the land in 1999 plus 6 percent annually in interest -- to have the deed restriction lifted.

"That makes the city whole for the value of the land," Walters said.

According to the Clark County assessor's office, that land is now worth upward of $400,000 an acre, or $64 million.

Walters previously has benefited from government action.

Last year, after failing to find a buyer for his Wildhorse Golf Club on Warm Springs Road just east of Green Valley Parkway, Walters sought a land swap with the city of Henderson. He and American Nevada Corp., a development company owned by the family that owns the Las Vegas Sun, bought the 138-acre course for $9.35 million in January 2004.

The council approved a trade with Walters in February. In exchange for the course, Walters and American Nevada received 126 acres of raw real estate that council members then rezoned residential.

Because Wildhorse was appraised at $34.4 million and the vacant city land at $40.2 million, Walters also had to throw in $5.8 million. He is permitted to build six homes per acre on the vacant property.

Perhaps Walters' most controversial deal came in 2000, when he entered the lease with McCarran International Airport to build two golf courses and a community park on 350 acres on the southeast corner of Warm Springs Road and Durango Drive.

Walters received a 99-year lease on the land at no cost, but the contract requires him to pay 50 percent of his revenues when he begins to make a profit on his project.

Two years after the agreement was signed, Walters successfully lobbied Clark County commissioners to rezone 60 acres to commercial, a much more valuable use of the vacant land.

Medical offices and a shopping center resembling The District at Green Valley Ranch are expected to be built by next summer, Walters said.

"Obviously when the area changed and water wasn't available, we went to the County Commission and asked for permission to build a portion of that land commercial," Walters said. "We went through a process. There was some controversy initially, but all the facts got straightened out."

Walters said water restrictions that allow only 30 acres of turf on new golf courses make it unrealistic to build a course that will be successful. Walters said he plans to build the course after water restrictions are lifted.

"I'd be happy to build a golf course tomorrow if I could build a normal golf course," Walters said. "I certainly am not going to build a golf course on 30 acres of turf."

The county's decision to rezone Walters' leased property that allows him to build an upscale shopping center on property designed for a park didn't sit well with all commissioners.

Commissioner Chip Maxfield said the county shouldn't have given Walters property when his nearby competitors had to pay as much as $10 million for their land.

"My largest concern was keeping the playing field level," Maxfield said. "If the government owns property and enters a lease where someone across the street has to purchase property, they have a holding cost. In a lease, you don't have upfront costs."

Mayo-DeRiso said Walters' lease agreements with local governments allow him to bypass the riskiest part of a business venture. That almost guarantees he will succeed, she said.

"These are complete sweetheart deals," Mayo-DeRiso said. "Here's a guy that gets public facility land by leasing it with no upfront costs. The biggest single and riskiest investment for a developer is purchasing the land."

Walters throws fundraisers for elected officials regularly, which gives him an advantage with governing boards, Mayo-DeRiso said.

During a six-year period ending in 2002, Walters contributed at least $87,000 to the campaigns of eight different Clark County commissioners, according to campaign contribution reports.

During that same time, he gave five Las Vegas City Council members $43,000.