A revamped lease proposed for Bali Hai Golf Club would allow developer Bill Walters to pay $100,000 a year in rent and perhaps one day convert the Strip site into a giant retail, office and warehouse complex.
His firm, The Walters Group, wants to scrap its unprofitable 18-hole golf course near McCarran International Airport and build a 2 million-square-foot warehouse and retail center on the county-owned land.
The fixed yearly rent would replace the profit-sharing lease that the group has had with the airport for more than a decade -- a lease that has yielded zero rent on the 155 acres because no profits materialized.
And by rezoning the land from recreational to commercial use, the group's property improvement taxes would jump to $4 million from the $111,000 it paid this year.
The proposed changes in Walters' 99-year lease will go before Clark County commissioners on Tuesday.
"It's simply a higher and better use for the property," said Mike Luce, president of The Walters Group. "It has the potential to gain cash flow for the property."
The economic slump and downturn in the golfing industry have made it difficult for Bali Hai or any other golf course to turn a profit, Luce said.
The industrial park, if built, would house diverse vendors who would supply hotels and casinos with goods needed to run their operations, such as uniforms, beverages, soaps and paper products.
A 365,000-square-foot shopping center would be built on the edge of the property facing Las Vegas Boulevard.
Luce said he didn't know when his group would break ground, but it aims to begin preliminary work soon, such as planning, engineering and design.
County Commissioner Steve Sisolak said he likes that the project would create about 2,200 construction jobs and about 800 permanent jobs when the mega-complex is finished.
It also would save 190 million gallons of water that the golf course is consuming yearly, Sisolak said. The county would get $3.9 million more in tax revenue, and the airport finally would receive rent for the site, he said.
"That's all significant to me," Sisolak said.
At first glance, $100,000 in yearly rent might seem low for a large piece of land near the Strip, but land prices have dropped by almost 90 percent since the economy tanked, said Jeremy Aguero, principal at Applied Analysis, a Las Vegas firm that tracks economic trends.
"The lease reflects (property) values today," Aguero said.
A bigger question is when it would become feasible for Walters to develop a project of this scope in a market in which office vacancy rates are at 22 percent and industrial vacancy rates are at 18 percent.
Luce acknowledged that economic conditions are far from ideal.
Contact reporter Scott Wyland at swyland@review journal.com or 702-455-4519.