We want a real estate recovery as much as anyone in Southern Nevada, but the land value spike recently addressed by the state Board of Examiners wasn't the great news taxpayers have been hoping for.
The land in question is vacant property on Charleston Boulevard at northbound Interstate 15. The Nevada Department of Transportation needs the 2.85 acres for the $1.5 billion Project Neon, the badly needed widening and reconstruction of I-15 between Sahara Avenue and the Spaghetti Bowl. When finished at the end of the decade, the upgrades should speed traffic flow along the busiest stretch of road in the state.
In 2011, the land was appraised at $4.7 million. The state offered that amount for the land, but the owners declined.
An appraisal this year increased the value to $10.6 million, a figure the owners' lawyer says is closer to its actual worth. Land value more than doubling in a single year? Has our time machine just taken us back to 2005?
Attorney General Catherine Cortez Masto and Gov. Brian Sandoval voted Oct. 9 to pay the higher price anyway, while Secretary of State Ross Miller voted against it. It's not quite a done deal, but it's close - once an easement on the property is settled, NDOT will pay the additional $5.9 million, and the state will take ownership.
By now, Nevadans are accustomed to complications when government wants private property for public projects or redevelopment efforts. Downtown eminent domain disputes have cost taxpayers millions of dollars, and some property owners have seen their constitutional rights trampled in the process. At least in this case, the land is needed for a truly public purpose. Project Neon is vital to improving Southern Nevada's traffic woes and economy, and progress on getting it started must continue.
Transportation Department Director Rudy Malfabon, in a memo to the board, said the property owners could receive a settlement of greater than $10.6 million if the matter were resolved in court. Of course, the owners could have received less. Would a piece of property that doubled in value in one year inflate that much more in another 12 months? "I am shocked. No Las Vegas property value goes up that much in value in the economic downturn," Ms. Masto pointed out.
Mr. Miller asked for a delay to determine whether the new price was appropriate. However, Gov. Sandoval and Ms. Masto carried the day. Gov. Sandoval said he agreed to the settlement because property values could increase even more and cost Nevada taxpayers additional money. Litigation isn't cheap, either. "It's bad news today, but good news to Clark County and Las Vegas," Gov. Sandoval said.
Mr. Malfabon said the state has secured 29 of the 52 pieces of private property it needs for Project Neon. This sale is bound to drive up the price of each of those remaining parcels. It's the perfectly predictable result of a single buyer with deep pockets following a very public plan.
Could the state have done better? Maybe. But delaying Project Neon a year or more would cost the state far more than $6 million in lost productivity.